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Ask Mary: What EIP Questions Are You Hearing?

I have been flooded with questions from our members regarding economic impact payments (EIPs). So, in lieu of choosing only one question, I have compiled a list of commonly asked questions and provided detailed answers for each.

Ask Mary: What if a stimulus or refund payment is made payable to two people (husband and wife for instance) and one of the parties has passed away?

Paper Check: If a Treasury Check is made payable to two parties with "and" between their names, then both parties must endorse the item. If one party is deceased, I do not recommend accepting the check. If the check does not have "and" between the names, then either can endorse and the money can be put into the account of the surviving person.

ACH: Because no endorsement is necessary for ACH entries, if the account number is correct, the account is open and the payment is not a federal benefit payment, the ACH entry can post. The IRS has stated that the agency sending ACH stimulus payments is determining eligibility. And, since payments EIPs are not federal benefit payments, they are not subject to reclamation.

Ask Mary: If payments are dated for a future date, can we accept the check now?

Paper Check: According to Uniform Commercial Code (UCC), you "may" accept post-dated checks, however; this may be against your institution's policy. Several financial institutions have discussed this topic on the Knowledge Community. Some are accepting the post-dated paper checks; some are waiting until the date on the paper check to accept. The IRS stated in a recent webinar that they will not return a check for posting early. So, it is up to your financial institution as to how you want to handle this, but just make sure you are handling them all the same. For example, if you accept the checks before Friday for one person, you need to do so for everyone else.

ACH: According to the Green Book, “any non-Same Day ACH credit payment must be made available for withdrawal by the Receiver no later than 9:00 a.m., Receiving Depositary Financial Institution (RDFI) local time, on the settlement date (provided the entries are made available to the RDFI by its ACH operator no later than 5:00 p.m. on the business day prior to the settlement date).” Although the federal government can transmit ACH credit entries up to 4 calendar days prior to the Settlement Date, the RDFI has no obligation to provide the funds of those credit entries prior to the Settlement Date.

Ask Mary: How should we handle ACH EIPs to charged off accounts?

The ACH Rules do not address how to handle these situations. Instead, it is a business decision that is made based on state law (right to offset for charged off accounts) and state contract law (i.e. your deposit agreement for overdrawn accounts). Once you determine if you have the right to the monies, then you need to consider the potential negative publicity you might receive since these payments are intended to ease financial pressures. Most state Attorney Generals have been very vocal, and encourage entities to not use stimulus money to collect debt. This doesn't mean you have to take losses, but you may want to consider ways to work with your account holders during this time.

Ask Mary: What if the account is closed or the ACH EIP is hitting our non-post due to invalid account number or transaction code?

You should be handling these EIPs as you would any other Federal non-benefit payment (specifically from the IRS). All Green Book and ACH Rules apply. This includes:

  • Returning payments to closed or frozen accounts
  • Returning payments for invalid or incorrect account numbers
  • Posting payments to open accounts for deceased beneficiaries or rep payees
  • Posting payments to overdrawn accounts
  • Returning payments refused by account holders

Ask Mary: What do we know about the third round of EIPs?

The third weekly round of Economic Impact Payments have been initiated by the U.S. Treasury, with a settlement date for ACH Direct Deposits of Wednesday, April 29. Although the IRS and Treasury have not stated the volume of payments in this round, Nacha expects it to be significantly larger the last week’s second round.

According to an IRS news release on Friday, April 24, the IRS issued a total of 88.1 million EIPs through the first two rounds, transferring about $158 billion to recipients. The IRS release includes a state-by-state breakdown of the number of payments and the associated dollars.

Ask Mary: Are there any other government payments we should have on our radar?

According to the Department of Health and Human Services, an additional $20 billion in economic assistance provided by the CARES Act is being distributed to Medicare facilities and providers by ACH, which began on Friday, April 24. Assuming the same payment flow as the initial round, the payments that are made by ACH will be via Optum Bank as the ODFI with "HHSPAYMENT" as the payment description. The latest legislation passed by Congress on April 23 provides an additional $75 billion for this fund.

If you have more EIP questions, contact Member Support via phone at 800.500.0100, email us at memserve@epcor.org or chat with us on our website. And remember – your fellow members are a great resource to find out how other financial instructions are handling the same issues you’re dealing with! Start a discussion and chat with your fellow members on the Knowledge Community today! While you’re out there, be sure to check out our COVID-19 Resources folder and our helpful EIP infographic.