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Q.) One of our commercial customers originated a payroll effective for Friday. On Thursday, they notified us of a fraudulent item in the payroll batch so we originated a reversal which was also effective on Friday. We called the RDFI who told us they had released the payroll credit to the receiver on Thursday (ahead of the effective date) and could not honor the reversal due to insufficient funds in the account. Is this permissible? Should they have to allow the reversal, since they voluntarily provided early credit?
A.) By posting early the RDFI is taking on risk of non-settlement, but the ACH Rules are silent on posting credits early (they just can’t be posted late). If the funds aren’t in the account, the RDFI can return the reversal (NSF). Keep in mind that as the ODFI you warrant that transactions are valid at the time of origination and therefore, the RDFI would not be out of compliance with the Rules.
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