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Federal R eserve Bank OF DALLAS W IL L IA M H. W A L L A C E DALLAS. TEXAS 7 5 2 2 2 FIRST VICE PRESIDENT AND CHIEF OPERATING OFFICER December 23, 1988 Circular 88-93 TO: All financial institutions in the Eleventh Federal Reserve District that receive ACH transactions SUBJECT Instructions for proper completion of paper government NOC forms SUMMARY As stated in our circular 88-82 dated December 1, 1988, the Treasury has asked the Federal Reserve Bank of Dallas to accept paper notifications of change (NOCs) for government payments and convert those NOCs to automated form for financial institutions that do not automate government NOCs themselves. Our four offices will begin accepting these paper NOCs on January 3, 1989. This circular explains the instructions for. the proper completion of these paper government NOCs. DETAILS The Treasury has chosen to use the commercial NOC process for submitting government payment data changes to agencies originating those payments. This means financial institutions that do not automate government NOCs may submit government payment data changes to their local Federal Reserve Office using the commercial NOC form. However, there are a number of critical differences in data requirements for government NOCs than have been required in the past for completing commercial NOCs. Failure to fully and properly meet government agency requirements for data when preparing an NOC will cause the NOC to be rejected. This will result in a delay in applying the requested changes and may cause a significant delay in availability of funds to your customer. The following is designed to help you avoid such a delay We will first provide a general overview of agency requirements and then discuss each requirement*in detail. Frequent reference, for clarification, will be made to the attached examples. For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - GENERAL OVERVIEW 1) A]2 information referenced in the attachments must be entered on the NOC form. Data elements considered discretionary for inclusion on commercial NOCs are not discretionary for government NOCs. 2) Government agencies use the claim number (individual ID) as one of the keys to identifying a payment recipient on their files. Each agency has one or more specific structures for claim numbers. A failure to exactly follow a correct claim number structure will cause the NOC to reject. 3) To identify a specific payment for an individual who may receive multiple payments, government agencies use the type of account (demand or savings) to which the payment is sent. This type of account must be indicated on the NOC. 4) Government agencies require that depositor account numbers (termed "DFI Account Number" on the NOC form) contain no imbedded blanks. 5) Government agencies only accept four change codes and the changes associated with those codes. This is discussed later (see page 5 & 6). Changes other than these types cannot be handled with the paper NOC form. 6) Because the Federal Reserve will apply editing and processing steps to a government NOC different from those required for a commercial NOC, a notation must be made on the NOC form to indicate the NOC is for a GOVERNMENT PAYMENT. DETAILED INFORMATION The following information references numbered items on the attached sample entry register and sample completed NOC forms. You must enter all information referenced on the sample Entry Register on the NOC form. Items 1-8, 10-13 and 15 should be entered on the NOC form exactly as presented on the Entry Register. Please note that data fields may be located in different positions on the entry register provided by your software or service bureau. Institutions should determine if their software or service bureau changes the data in any field from the way it is sent by the originating agency. If data in any field is ch^f^ged, then it must be restored to its original form so the NOC can be properly completed. Please review, the possibility that payment data may have been changed in sequence or form from that in which the government agency sent the data with your data processing staff or service bureau and request changes if necessary. All data entered should be complete and leftjustified when entered on the NOC form. Some fields require special attention (see next page). 3 - DETAILED INFORMATION continued: Item 3 — Company Discretionary D at a. Government agencies that send this element require that it be returned on the NOC form. This 20-position data field must be entered in the Company Discretionary Data field on the NOC form exactly as it was sent out by the originating agency. Item 5— Company Descriptive Date. This date must be returned. It must also be in the same order/format in which it was sent by the originating agency. Item 6 — Receiving Depository Financial Institution Transit/Routing Number. The transit/routing number addressed in the payment must be placed in this field. This is true even if the institution has been merged, assumed by new owners or closed. Item 10— Individual ID Number (Claim Number). This alphanumeric data element must be returned in the proper format. The structure of the Individual ID number is so important to the originating agencies that it will be the subject of a special discussion later in this circular (see page 4). Please give this discussion your special attention. Item 11— Discretionary Data. Use of this one- or two-character field is discretionary only to the originating agency. If the discretionary data field in the original item contains data, then that one- or two-character field must be returned. Fill in the field on the NOC with the one or two characters sent, It must be left-justified. Item 15— Type of Account. The type of account (demand or savings) to which the original payment was sent must be reported to the originating agency when submitting the NOC. Since there is noplace on the NOC form for indicating the type of account, it must be written on the form in the open space next to the Company Descriptive Date field. (See Item 15 on attached figures 1 through 5.) Item 16— Government/Commercial Indicator. Since- editing and processing are different for government NOCs than for commercial NOCs, it is necessary that the notation "GOVERNMENT" be made on government NOCs in the open space next to the Debit/Credit indicator boxes. (See Item 16 on attached figures 2 through 5.) - 4 - Claim Number Structures Government Agencies use of the claim number (Individual ID number). Since government agencies send out millions of payments each month, the claim number (Individual ID number) is critical to identifying the payment recipient whose payment information needs changing. The originating agencies have special structures for the claim number and have no tolerance for a claim number returned in a format that is not consistent with their structure. For your use and information, the structure of the claim numbers for the "big five" (two of the "big five" are actually both Social Security, SSA and SSI) agencies are presented below. Sample Claim Number Structures Agency Claim Number Structures* Examples Social Security Administration 999999999XXbSSA 999999999XbbSSA 999999999bbbSSI 999999999XXbMBb 123456789C1 123456789A 123456789 234567890LW Office of Personnel Management Xb9999999bXbXXX Xb9999999b9bXXX F 1234567 W CSF A 1234567 0 CSA Veterans Administration 999999999b99b99 b99999999b99b99 162306890 10 01 12345678 00 06 Railroad Retirement Board XXX999999999b9b Xbb999999bbbb9b WCA123456789 7 A 123456 1 ♦Key: X = alpha, 9 = numeric, b = blank SSA SSA SSI MB - 5 - Embedded Blanks Embedded blanks in Depositor Account Number. For years government agencies have refused to accept depositor account numbers with embedded blanks. Most financial institutions are aware of this, but some institutions fail to note this requirement to personnel completing change documents. Please reiterate this requirement to your ACH personnel, since in many institutions these personnel do not handle the 1199 form used to sign up payment recipients for direct deposit and may not be aware of this requirement. Change Reason Codes Government Agencies only accept four change reason codes. ,Government agencies will only accept the four codes listed in the table below and, of course, data changes associated with those four codes. Agencies will also edit change data associated with the four codes in order to ensure the change data 1) is different from the original data and 2) is the data that should be changed for the code used. Example 1: An NOC with a change reason code of C01 with the same number in both the DFI Account Number field and Change Field 1 will be rejected. Example 2: An NOC with a change reason code of C05 containing a depositor account number in Change Field 1 will be rejected. Particular attention should also be paid to the Change Field used. Data in Change Field 2 of any NOC with a change reason code other than C03 may be rejected, (see the following page for the table of change codes) - 6 - TABLE OF CHANGE CODES FOR FEDERAL PAYMENTS : : : CHANGE REASON CHANGE CODE* REASON : C01 : C02 Incorrect Depositor Account Number Incorrect Transit/ Routing Number (TRN) : C03 Incorrect Transit/ Routing Number and Incorrect Depositor Account Number : C05 Incorrect Transaction Code ENTER CORRECT DATA IN CHANGE FIELD 1 1 1 & 2 1 EXAMPLES To correct a data entry error or to modify the account numbering structure (e.g., to drop a branch code; or to issue a new number to an account) : : : : : : : : To accommodate a merger or system consolidation; to change the TRN to the correct TRN for the FI. : : : : : : : To accommodate a : merger or system : consolidation. : This code requires : that both Change : Fields 1 and 2 be : used: the new : account number goes : in Change Field 1 : and the new TRN goes: in. Change Field 2 : To change the : depositors account : from savings to : demand or demand to : savings. : *Use of any other NACHA change codes for government agency payments is not authorized. 7 - Correct Government NOC Identification Government NOCs should be identified for correct processing. Since government NOCs are subject to different rules for processing than are commercial NOCs, it is important to identify a government NOC by writing "Government" at the top of the NOC form in the space next to the debit/credit boxes. (See Item 16 on figures 2-5 attached.) Failure to provide this indication may cause incorrect processing by the Fed and result in the requested changes being delayed or rejected. Data Requirement to be Left-justified Finally, all data must be entered left-justified in each field. There should be no embedded spaces in any data except spaces placed in data fields by the originating government agency. (See details of the previous discussion on Government agencies use of the claim number.) NOCs should contain only change data. They should not contain instructions or messages we have seen, such as "s/b" for "should be" in Change Field 1 or 2. When Errors Occur Paper government NOCs submitted by Eleventh District financial institutions for conversion and automation by the Fed will be edited for all government agency requirements and will be rejected the Fed if those requirements are not met. Whenever an NOC fails our edits, a letter will be sent to the submitting financial institution restating all data on the NOC. It will contain clear statements describing«t^e_ error or errors found and instructions on what must be done to correct those errors. Since the NOC form will not be returned to the financial institution, corrections may be made by marking necessary changes to the data in.the letter and returning the letter to the local Fed office or directly to the Houston Branch at the address stated in the letter. Processing Time We expect to process and deliver NOCs to the originating government agency within two business days of the deposit date of the NOC at any Eleventh District Fed Office. NOCs prepared within a few days of receipt of the payment or transaction requiring a change should be processed by the originating government agency prior to the next payment date. ATTACHMENTS See the attached examples of an entry register and completed NOC forms which have been referenced in this circular. - 8 - MORE INFORMATION For more information on these instructions for proper completion of paper Government NOCs, please contact: Tracy Whitten or B. B. Sessions at the Dallas Office Local: (214) 651-6403 Toll Free: TX (800) 442-7140, LA (800) 527-9200 Eloise Guinn or Jane Pyke at the El Paso Office Local: (915) 544-4730 Toll Free: TX (800) 592-1631, NM (800) 351-1012 Louis Moore or Lilia Hice at the Houston Office Local: (713) 659-4433 Toll-Free: (800) 392-4162 Carrie Perkins or Jennifer Pruitt at the San Antonio Office Local: (512) 224-2141 Toll Free: (800) 292-5810 Sincerely yours Attachment Figure 1. Sample Entry Register DATE 01/02/89 AUTOMATED CLEARING AND SETTLEMENT FACILITY CITY, STATE ZIP PAGE 01 9999-9999-9 ENTRY REGISTER RECEIVING POINT 9999-9999-9 STREET CORNER FINANCIAL INSTITUTION RECEIVING INSTITUTION 9999-9999-9 STREET CORNER FINANCIAL INSTITUTION COMPANY US TREASURY 349 3062036096 SOC SECENTRIES EFFECTIVE 01-03-89 SETT PPD 003 ORGIN NO. OSC 2 EEEEEEEEEEEEEEEEEEEE 0620-3609 010289 BATCH ID 037 CUSTOMER NAME ID NUM8ER JOHN J JONES SUE ELLEN SMITH ERIC J BROWN 123456789AB SSA 062036091234567 DEMAND CR 446813579 CP000000000.00 000000346.50 123456789A SSA 062036091234569 SAVING CR 446813456 000000000.00 000000367.80 123456789NN SSA 062036091234574 DEMAND CR 446819871 N 000000000.00 000000261.00 TRACE NUMBER ***BATCH TOTALS*** ENTRY TYPE ACCOUNT NO DISC DEBIT AMOUNT CREDIT AMOUNl ENTRY - ADDENDA COUNT 3 TOTAL DEBITS TOTAL CREDIT* 000000000.00 000000975.30 ATTACHMENT Figure 2. Examples of Completed Government NOC forms for Change Reason Codes CO! and C02. NOTIFICATION O F C HANGE C re d it Trace Number Government_______ ( P l e a x (3)--------- j E . E .3 ■ 4, 9 , 6 17 1 P rin t L egibly) I 1 4 . 4 | 6 :8 i Ch an ge Field 1 li 3i 5 i 9 , 7 1 . i i i i i ' . i ' i i i i i i i ,E i Ej E, E . E . E , E . E . E . E . E ,E , E, E, E . E . E . E , --------- 1 3 . 0 . 6 .2 Company 10 0 a 6 i i i i i i ' i i i 111 1 i | | | 3 i; 2 3 4 567 9A|Bt t> | | $$ A Disc. Data | J | 0 tH , N , RETURNED BY: 4 14 , 9i 9 i - i 9 i 9 , 9 i9 , - , 9 f ,P , y Individual ID Demand- | t J t 0 i N tE | $ i Individual Name I9 i9 i i C h an g e Field 2 (Required for C h an ge Codes 03, FOR THE ACCOUNT OF: I0, 9, 61 — < 0 ,1 .0 ,2 , 3, 91 C om pany Descriptive Oat* ©- 5 This p osted entry contained invalid o r outdated information. Please revalidate this information with your customer/employee. Description of change requested. C om pany Discretionary Oata @ A Effective Entry Date I Ol l l — f 0 1 3 I —18 t9 I— Month Day Year ORIGINATED BY: ----------- I U 1S 1 i Ti Ri Ei A i~Sru"TRiY i C om pany Name fl- L - f o 2 l Q | 3 | 6 | 0 | 9 l l l2 i3 I Receiving Depository Financial Institution Transit/Routing Number 16 1 8 il i3 5 7 DFI A ccount Number ii g iR eason - -( <°ii - - Code I ? C han e i 9i i t | | | i i | i | ATTACHMENT Figure 3. Examples of completed Government NOC forms for Change Reason Codes C03 and C05. NOTIFICATION O F CHANGE T r i e . Number I 0|6|2|0|3|6 | | Q | 1 I ? ; A fi Ifi >7 I 0 3 IQll 1 iQ l3l~l8 19 I - - - (&) ~ Effective Entry O ate D Debit Credit © ■ - tih S i iT i Ri l A i S i U i R i Y I -E i3 i 4i Qi I This posted entry contained invalid or outdated information. Please revalidate mis information with your customer/employee. Description of change requested. i 9i i3 1 8 Company Name (3}------l i l E lE |E |E i Ei Ei Ei E ( J )----- 13 |0 16 g 1 0 I I I I C hange Field 1 1 E 1E iE iE iE £ i Ei Ei Ei E , F I Com pany Discretionary Data , 3| 6 | 0 i 9 | 6 | C om pany 10 ) Month Government ______ (P leate Print legibly) ORIGINATED BY: l i 6 |. ^ 5 lL7 1 1 V 81j iJ 9 . C h an g e Field 2 (Required for C h ange C odes 03. FOR THE ACCOUNT OF: 11 12 |3 |4 |5 i 6| 7| 8i 9 1AiB i —1 ° i l 1 0 2 i 81 9 i C om pany Descriptive Oate S a v in a s- iS iS iA | Individual ID | J |0 |H iN i | J; . J . O .in i i t .S i N E i Individual Name RETURNED BY: ©- 14 1 ,6 ,8 ,1 3 i 5 , 7 , 9 , 4 -tSjg 9 i 9i - i 9i 9 [9 1 i - fl 1 9 Receiving Depository Financial Institution Transit/Routing Number DFI A ccount N um ber 1C | 0 | 3 |---------------C hange R eason Code © IIII . Day Year