Federal Reserve Bank Fedach Participation Agreement
See 55 FR 18755, 18758 (4 May 1990). A consumer or business can make an electronic credit payment instead of issuing a paper check. Through a telephone service, a PC interface or a written authorization, the consumer orders a bank to debit his account and grant credit to the beneficiary`s bank account. A company usually creates a computer file containing payment instructions and provides the file to its service bank. The supporting bank debits its customers` accounts and provides the ACH with an electronic file containing all the payment orders it has received from all its customers. POSTCOMMERCIAL ACH payments are subject to national automated clearing house association (NACHA) rules, while Department of Finance payments are subject to federal rules, which generally comply with LAA rules. AA membership is made up of representatives from the 40 ACH regional associations in the United States. All ACH Association institutions must be custodian banks – commercial banks, savings banks, savings and credit associations, U.S. branches of foreign banks, Edge Act companies and credit unions. Today, more than 25,000 custodian banks participate in the ACH system. A daily overdraft fee is levied for certain institutions, levied on the average daily overdraft fee collected by the institution. These include edge and agreement companies, banks that are not subject to reserve requirements, and limited-purpose trust companies. The annual rate used to determine the daily overdraft tax is the annual rate of other institutions` day overdrafts (50 basis points) plus 100 basis points by the fraction of a 24-hour day in which Fedwire is to operate (currently 22/24).