Do Green Book Changes Impact Your Liability?

Amy Donaghue

By: Shelly Sipple, AAP, APRP, NCP, Senior Director, Certifications & Continuing Education

In 2020, the U.S. Department of the Treasury, Bureau of Fiscal Service (Fiscal Service) made updates to the Green Book, which is a procedures manual for use by financial institutions in the processing of federal government ACH payments. Many of the updates reflect recent ACH Rules changes implemented under 31 CFR 210, primarily amendments to the Same Day ACH Rules. Thus, bringing ACH payment processing by federal agencies more in alignment with the private sector. Additionally, the Fiscal Service updated definitions as well as contact phone numbers and provided some clarifications related to ACH payment processing.

Chapter 5, which covers the reclamation process, is an excellent resource and one of those chapters where clarifications were made. Unfortunately, the clarification has caused some confusion instead.

Under 31 CFR 210, acceptance of a federal benefit payment constitutes your institution’s agreement to reclamation actions and the debiting of your Federal Reserve account for any reclamations for which you may be liable. Your liability is the total amount of ALL federal benefit payments received after death or legal incapacity of a recipient unless you have the right to limit that liability.

This does not change; however, the recent clarification might lead an RDFI to believe they are liable for only post-death benefit payments received after they become aware of a death. Again, this is not the case. The clarification is meant to ensure RDFIs leave federal benefit payments received prior to the date of death in the recipient’s account since these payments will not be reclaimed.

Again, remember your institution is fully liable for ALL federal benefit payments you receive after a recipient’s death. And that means once you have knowledge of a beneficiary’s death, it is your responsibility to act upon it and limit your liability.