Reclamations

Section 1: Background

Reclamation is a procedure used by the federal government (government) to recover benefit payments made through the Automated Clearing House (ACH) to the account of a recipient who died or became legally incapacitated or a beneficiary who died before the date of the payment(s).

The government's right to reclaim funds is established in Title 31 of the Code of Federal Regulations Part 210, Subpart B, Section 210.10(a). The government's reclamation process is found in 31 CFR 210.9 through 210.14. The reclamation provisions of 31 CFR 210 completely preempt the reclamation provisions of the NACHA Operating Rules with respect to federal benefit payments.

By accepting a recurring benefit payment from the government, a receiving depository financial institution (RDFI) agrees to the provisions of 31 CFR 210, including the reclamation actions and debiting of the RDFI's Federal Reserve Bank account for any reclamation for which it is liable. This liability provision of the federal reclamation regulations is part of the contract between the government and the RDFI. The two parties thereby agree to share liability for post-death payments. This contract is renewed by the RDFI each time it accepts an ACH enrollment and is agreed to by reference each time it credits an ACH payment on behalf of a depositor.

Note: "Death" always means the death or legal incapacity of a recipient or the death of a beneficiary. And "government" always means the federal government.

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