M&T ACH Services ACH RETURNS MANUAL

M&T ACH Services ACH RETURNS MANUAL

M&T ACH SERVICES Welcome to M&T Bank Services and the latest update to our ACH Returns Manual. This ACH Returns Manual is your resource for frequently asked information on the ACH Returns process and offers you practical insights into the National Automated Clearing House Association (NACHA) network. Table of Contents ACH Network Participants 3 ACH Returns Overview 4 Customer Activity Reports 5 Return Reason, NOC, and SEC Codes 6 Deletions, Reversals and Reclamations 10 ACH Return Delivery Options 12 Sample Customer Activity Reports ACH Recovery of Request Form NACHA ACH Returns File Layout Appendix A Appendix B Appendix C 2

ACH NETWORK PARTICIPANTS Identified below are the five participants involved in an ACH transaction. The terminology described below will assist you in understanding the workings of the ACH network and the roles of each participant. Originator The Originator is the entity or company that agrees to initiate ACH entries into the payment system according to an arrangement with a Receiver. The Originator is usually a company directing a transfer of funds to or from a consumer or another company s account. Originating Depository Financial Institution (ODFI) The ODFI is the institution that receives the payment instructions from Originators and forwards the entries to the ACH Operator. Automated Clearing House Operator An ACH Operator is the central clearing facility operated by a private organization or the Federal Reserve Bank on behalf of Depository Financial Institutions, to or from which participating Redfish transmit or receive ACH entries. Receiving Depository Financial Institution (RDFI) The RDFI is the Depository Financial Institution that receives ACH entries from the ACH Operator and posts the entries to the accounts of its depositors (Receivers). Receiver A receiver is a natural person or an organization that has authorized an Originator to initiate an ACH entry to the Receiver s account with the RDFI. A Receiver may be either a company or a consumer, depending on the type of transaction. 3

ACH NETWORK PARTICIPANTS The example below illustrates the ACH credit process: ACH Credit Transaction- Information and Funds Flow As illustrated above, a payroll deposit (PPD) credit flows from an account at a company s financial institution to an account at an employee s financial institution. This also illustrates the flow of a corporate trade exchange (CTX) credit from an account at a company s financial institution to an account at a vendor s financial institution. Credit entries must be posted to a Receiver s account no later than Settlement Date. Consumer (PPD) entries that are made available to the RDFI by its ACH Operator by 5:00 p.m. (RDFI s local time) on the banking day prior to Settlement Date must be made available by opening of business on the Settlement Date. The example below illustrates the ACH debit process. ACH Debit Transaction- Information and Funds Flow In the above illustration, a preauthorized mortgage payment flows from a consumer s account at a financial institution to a mortgage company s account. This also illustrates a corporate cash concentration flow from a company s local or regional financial institution account to a company s regional or national financial institution account. Debit entries must not be posted to a Receiver s account prior to the settlement date. Source: NACHA Rules Book: www.achrulesonline.org. 2008 3

CUSTOMER ACTIVITY REPORTS The purpose of this manual is to provide you with information to understand the ACH returns process and make the necessary adjustments on your company s posting systems. The ACH process includes the ability for a receiving financial institution to return entries for specific reasons such as closed accounts or insufficient funds. The reasons are defined by the NACHA return reason codes. When M&T Bank receives an ACH return from another financial institution, information on return entries are provided to you on the Customer Activity Report (CAR). This report is your tool to assist you in managing ACH returns activity. An explanation of all Customer Activity Reports and samples are provided in this manual. Return entries are voided transactions. These transactions, which can be either debits or credits, have not been applied to the receiver s account. As the originator, your account will be credited or debited for these return items, and it is your responsibility to determine how to settle with the intended receiver of the funds. The Customer Activity Reports will also include correcting entries called Notification of Change (NOC). This notice indicates information included in the original entry was changed at the receiving bank. It is your responsibility to correct future entries as indicated on the NOC. NOCs are not returned funds. The credit or debit has been applied to the receiver s account at the Receiving Depository Financial Institution (RDFI). Failure to correct NOCs promptly may result in NACHA fines. Every ACH item returned or notification of change will have a reason code associated with the transaction. The reason code is determined by the receiving financial institution and sent back to M&T with information on the original transaction. A list of frequently used ACH Return and NOC reason codes is provided in this manual. The M&T Treasury Management and Merchant Customer Service (TMMCS) Department is available to assist you with any ACH related matters. The customer service staff is available from 8:30 a.m. to 6:00 p.m. (EST), Monday through Friday, and can be reached at (800) 724-2240. 4

CUSTOMER ACTIVITY REPORTS The Customer Activity Report (CAR) is a statement that informs you of daily ACH activity impacting your account. The CAR statement is used to document and identify the following transactions impacting your account on a given day. Transaction Adjustments Notification of Change (NOC) Requests ACH Return Transactions Settlement and Settlement Adjustment Transactions For a listing of frequently used ACH Return and NOC reason codes, please refer to pages 6 8. CAR statements can be mailed, faxed, transmitted electronically or presented on the bank s information reporting platform. EXPLANATION OF ENTRIES The CAR statement consists of five sections. Each section is numbered by the Roman numeral values I through V. Identified below are the sections and their corresponding topic: SECTION I: SECTION II: SECTION III: SECTION IV: SECTION V: Adjustment Activity Completed Today Notifications of Change Items Returned Adjustment Activity Affecting Settlement Today Settlement of Reconciliation for Today Each category of information is reported in its own section on the statement. Any section that does not contain data will be generated and indicate NO ACTIVITY. Each report includes a section that lists the account number, settlement date, name and address of the account older, and the report title ACH ACTIVITY SUMMARY. This report details all activity that relates to ACH transaction that were originated on your behalf. The sample CAR statements are provided in Appendix A. 5

RETURN REASON, NOC AND SEC CODES NACHA Return Reason Codes A three-digit code provided with an ACH return transaction indicates the reason the item has been returned by the receiving bank or the ACH Operator. These codes appear on the CAR Statements in the Items Returned section. Below is a list of the most frequently used return transaction codes and their definitions. For a complete listing of all ACH return reason codes refer to your NACHA Rules book. RETURN ORIGINATION FIELD DESCRIPTION CODE R01 INSUFFICIENT FUNDS The available and/or cash reserve balance is not sufficient to cover the dollar value of the debit entry. R02 ACCOUNT CLOSED A previously active account has been closed by action of the customer or the RDFI. R03 NO ACCOUNT/UNABLE TO LOCATE ACCOUNT The account number does not correspond to the individual identified in the entry or the account R04 R05 R06 R07 INVALID ACCOUNT NUMBER UNAUTHORIZED DEBIT TO CONSUMER A/C RETURNED PER ODFI REQUEST AUTHORIZATION REVOKED BY CUSTOMER (ADJUSTMENT ENTRIES) number designated is not an open account.. The account number structure is not valid. The entry may fail the check digit validation or may contain an incorrect number of digits. A CCD, CTX, or CBR debit entry was transmitted to a consumer account of the receiver and was not authorized by the Receiver. The ODFI has requested that the RDFI return the ACH entry. If the RDFI agrees to return the entry, the ODFI must indemnify the RDFI. The Receiver has revoked the authorization previously provided to the Originator for this particular transaction. The Receiver must also provide the RDFI with an executed affidavit declaring and swearing under oath that the receiver has revoked the authorization for the debit entry. R08 PAYMENT STOPPED The Receiver of a recurring debit transaction has the right to stop payment on any specific ACH debit. R09 UNCOLLECTED FUNDS Sufficient book or ledger balance exists to satisfy the dollar value of the transaction, but the dollar value of the transactions in the process of collection (i.e. Uncollected checks) brings the available and/or cash reserve balance below the dollar value of the debit entry. R10 CUSTOMER ADVISES NOT AUTHORIZED (ADJUSTMENT ENTRIES) If customer, The Receiver has notified the RDFI, that the Originator of a given transaction has not been authorized to debit his account. The Receiver must provide the RDFI with an executed affidavit declaring and swearing under oath that the Receiver did not authorize the debit entry. R12 BRANCH SOLD TO ANOTHER DFI A financial Institution may continue to receive entries destined for an account at a branch that has been sold to another financial institution. R13 NONPARTICIPATING RDFI RDFI is not an ACH member, or routing number is R14 ACCOUNT-HOLDER DECEASED invalid. The account holder is deceased. No additional payments should be sent to this account. 6

RETURN REASON, NOC AND SEC CODES R15 BENEFICIARY DECEASED The beneficiary entitled to the benefits is deceased. No additional payments should be deposited. R16 ACCOUNT FROZEN The funds in the account are unavailable due to specific action taken by the RDFI or by legal action. R17 R20 R37 R38 FILE RECORD EDIT CRITERIA (SPECIFY) NON-TRANSACTION ACCOUNT SOURCE DOCUMENT PRESENTED FOR PAYMENT STOP PAYMENT ON SOURCE DOCUMENT Some fields that are not edited by the ACH Operator are edited by the RDFI. If the entry cannot be processed by the RDFI, the field(s) causing the processing error must be identified in the addenda record information field on the return. The ACH entry destined or a non-transaction account, as defined in Regulation D, would include either an account against which transactions are prohibited or limited or a pass-through with the entry is for a credit union or thrift organization and Regulation E descriptive requirements cannot be met. The source document for an ARC or POP entry has been presented for payment. An ARC entry had a stop payment order placed on the consumer s source document. 7

DELETION, REVERSAL, AND RECLAMATIONS NACHA Notification of Change Return Codes A three-digit code provided with a Notification of Change (NOC) indicates the reason an ACH transaction was adjusted by the receiving bank. These codes appear on the CAR statements in the NOC section. The item has not been returned. The RDFI has made a change to the ACH transaction you sent in order to post it to the receiver s account. A NOC is your notice to correct the transaction on your company s database before the same transaction is sent again. For a complete listing of all NOC Codes, refer to your NACHA Rules book. NOC CODE ORIGINATION FIELD DESCRIPTION C01 ACCOUNT NUMBER Account number is incorrect or is formatted incorrectly. The correct account number appears in the first 17 positions (left justified) of the Addenda Information Field. This code is also used when an account number is incorrectly formatted. C02 TRANSIT/ROUTING NUMBER Due to a merger or consolidation, a once valid routing number must be changed. The correct transit/routing number (including check digit) appears in the first 9 positions of the Addenda Information Filed. C03 TRANSIT/ROUTING NUMBER AND ACCOUNT NUMBER Due to a merger or consolidation, a once valid transit/routing number must be changed and the account number structure is no longer valid. Correct transit/routing number (including check digit) appears in the first 9 positions of the Addenda Information Field. Correct account number appears in the 13 th through 2o9th positions of the same field with spaces in the 10 th, 11 th, and 12 th positions. C04 ACCOUNT NAME Customer has changed name. Correct account name appears in the first 22 positions of the Addenda Information Field. C05 TRANSACTION CODE Transaction code is incorrect and this is causing the ACH entry to be routed to the wrong application (demand or savings). The correct transaction code appears in the first 2 positions of the Addenda Information Field. C06 C07 ACCOUNT NUMBER AND TRANSACTION CODE TRANSIT/ROUTING NUMBER, ACCOUNT NUMBER AND TRANSACTION CODE Account number is incorrect or is formatted incorrectly and the transaction code is incorrect causing the ACH entry to be routed to the wrong application (demand or savings). The correct account number appears in the first 17 positions (left justified) of the Corrected Data Field; correct transaction code appears in the 21 st and 22 nd positions of the same field with spaces in the 18 th, 19 th, and 20 th positions. Correct routing number (including check digit) appears in the first nine positions of the Corrected Data Filed; correct account number appears in the 10 th through 26 th the same field; and correct transaction code appears in the 27 th and 28th positions of the same field. C09 INDIVIDUAL IDENTIFICATION NUMBER The individual id number was incorrect. Correct number appears in the first 22 positions of the Corrected Data Field. C13 ADDENDA FORMAT Information in the Entry Detail Record was correct and the entry was processed and posted by RDFI. However, information found the addenda record was unclear or was formatted incorrectly. 8

DELETION, REVERSAL, AND RECLAMATIONS Standard Entry Class (SEC) Codes These three digit codes indicate the type of ACH transactions you originated. The most common transactions are Cash Concentration or disbursement (CCD) and Prearranged payments and Deposits (PPD). A CCD is a debit or credit that is originated to a corporate account and typically used for funds concentration and vendor payments. A PPD is a debit or credit that is originated to a consumer account and typically used by companies to collect bill payments (mortgage, insurance, health club dues) or to make payment to an employee (travel reimbursement, direct deposit of payroll). For a complete listing of SEC codes, refer to your NACHA Rules book. SEC ORIGINATION FIELD DESCRIPTION CODE ARC ACCOUNTS RECEIVABLE ENTRY A one-time ACH debit entry to a consumer s account, initiated by an Originator for purchases or payments that are made by US Mail, courier or at a drop box. BOC BACK OFFICE CONVERSION A check conversion entry that enables originators to convert an eligible check to a single entry ACH debit received at the point of purchase or manned bill payment location. CCD CASH CONCENTRATION OR DISBURSEMENT A credit or debit entry where funds are transferred between unrelated corporate entities, or transmitted as intra-company cash concentration and disbursement transactions. CIE CUSTOMER INITIATED ENTRY A credit entry initiated by or on behalf of the holder of a consumer account to affect a transfer of funds to deposit account of the Receiver. CTX CORPORATE TRADE EXCHANGE A corporate-to-corporate transfer of debit or credit entries, either between trading partners or within an organization for cash management purposes. Contains addenda information in the ANSI ASC X12 format. POP POINT OF PURCHASE ENTRY A debit entry used for non-recurring, in-person entries using a source document (i.e., paper check), for which there is no standing authorization with the Originator for the origination of ACH entries to the Receiver s account. PPD PREARRANGED PAYMENT AND DEPOSIT ENTRY A credit or debit entry initiated by an organization pursuant to a standing or single entry authorization. RCK RE-PRESENTED CHECK ENTRY A debit entry constituting a presentment notice of a paper check after the paper check has been returned for insufficient or uncollected funds. TEL TELEPHONE-INITIATED ENTRY Used for the transmission of single-entry consumer account debits based on an oral authorization that is obtained from the Receiver by the telephone. WEB INTERNET-INITIATED ENTRY A debit entry initiated to a consumer account and authorized by the internet. 9

DELETION, REVERSAL, AND RECLAMATIONS ACH payments initiated by you in error have three processes that may be taken to correct the payment. The appropriate process will be dependent upon the time the error is discovered. The three processes are: Deletion A deletion is a request to delete the payment from the origination file prior to releasing it to the Electronic Payment Network for processing. Reversal A reversal is a request to reverse the transaction if it has already been released to the Electronic Payment Network for processing and less than five banking days has elapsed since the settlement date of the original item. Reclamation A reclamation is a request to reclaim the payment from the receiver. This is a manual process that requires the receiving bank to return the transaction. Common reasons for a correction are: The item is a duplicate of a previously initiate entry The item was sent to a receiver for whom it is not intended The dollar amount of the item is different than what was intended. All requests made to M&T for deletions, reversal and reclamations must be completed on the ACH Recovery of Funds Request form. The form must be completed and faxed with a letter on your company letterhead requesting the bank to process the request. A sample ACH Recovery of Request form is provided in Appendix B. M&T Bank can request a deletion, reversal or reclamation from the Receiving Bank on your behalf. However, the Receiving Bank is not obligated to honor the request. If the request is denied by the RDFI, you must work outside of the ACH network to directly recoup the funds from the receiver. 10

DELETION, REVERSAL, AND RECLAMATIONS Timeframes and Processing Steps Deletion Process M&T can delete a transaction from the origination file only if the transaction is in the Bank s ACH system (PEP+) warehouse. The majority of origination files sent by customers are collected into the PEP+ system and released during the same processing window due to the frequency of ACH processing windows throughout the day. If this situation occurs, a deletion cannot be processed. If the Bank is unable to delete the transaction but it is still within five days of the settlement date, the Bank will initiate a reversal. Reversal Process Once transactions are released to the ACH Network, the NACHA rules allow you as the originator to reverse erroneous entries within five banking days after the settlement date of the original entries. An entire file, specific batches within a file or individual entries may b reversed. In all cases, the word REVERSAL (left justified) must be placed in the Company Entry Description Filed of each Company/Batch Header Record of an exact duplicate of the original transaction. Reclamation Process If five banking days have elapsed since the settlement date of the original item and the receiving financial institution does not accept reversals after that time. M&T can attempt to manually reclaim the entry. The reclamation process is initiated by M&T contacting the RDFI and requesting that the RDFI return the funds. Acknowledgement of Request The status of the request will be recorded in the Customer Activity Report. If the item was already returns, ACH operations will notify you by fax confirmation. 11

ACH RETURNS DELIVERY OPTIONS The CAR statements can be mailed, faxed, or presented on through the Web InfoPLU$ reporting service. For accounts with a high volume of ACH returns, an electronic file can be transmitted for automated posting of your returns. If you elect the have our ACH returns sent via an electronic file, the required NACHA file layout is provided in Appendix C. The file layout is also available in the NACHA Rules book. The best delivery option for you will depend upon your volume of ACH returns. The additional detail and processing information o the delivery options, please contact your Treasury Management Sales Consultant. 12

APPENDIX A 13

SAMPLE ACH ACTIVITY SUMMARY: M&T BANK ACCOUNT NUMBER: 1234567890 626 COMMERCE DR SETTLEMENT DATE: 10/16/20XX AMHERST NY 14228 PAGE 1 CAR REPORT SAMPLE ****************************** ABC COMPANY * M&T Bank * 123 ANY STREET * Member FDIC * YOUR CITY, STATE ZIPCODE ****************************** YNNNN:XXXXXXXXXX ACH ACTIVITY SUMMARY THIS REPORT DETAILS ALL ACTIVITY THAT RELATES TO ACH TRANSACTIONS THAT WERE ORIGINATED ON YOUR BEHALF. SAMPLE ADJUSTMENT ACTIVITY: I. ADJUSTMENT ACTIVITY COMPLETED TODAY- THIS SECTION CONFIRMS ALL ADJUSTMENTS COMPLETED TODAY ON YOUR BEHALF. FILE REFERENCE COMPANY NAME COMPANY ID EFF. DATE ENTRY DESC BATCH # 20072850252 ABC COMPANY 0000000000 07-10-20XX PAYMENTS 001 --------------------------------------------------------------------------------------------------------------------------------- DETAIL REVERSAL DEBIT AMOUNT CREDIT AMOUNT CUSTOMER SAMPLE 1 (5969346) 055002707 10000000000 $.00 $20,000.00 --------------------------------------------------------------------------------------------------------------------------------- TOTAL = 1 $.00 $20,000.00 14

SAMPLE NOTIFICATION OF CHANGE: II. NOTIFICATION OF CHANGE - THIS SECTION LISTS THE NOTIFICATIONS OF CHANGE RECEIVED FOR ACH ENTRIES ORIGINATED ON YOUR BEHALF. THE ORIGINAL ITEM INFORMATION IS FOLLOWED BY THE CORRECTED DATA. PLEASE MAKE THESE CHANGES TO YOUR RECORDS. ----------------------------------------------------------------------------------------------------------------------------- FILE REFERENCE EFF DATE COMPANY NAME COMPANY ID ENTRY DESCR. 20071920463 07-10-20XX ABC COMPANY 0000000000 9990025 ---------------------------------------------------------------------------------------------------------------------------- TC INDIVIDUAL NAME INDIVIDUAL ID TR ACCT # REF. # ---------------------------------------------------------------------------------------------------------------------------- 23 SAMPLE 4 123456000 021307559 000000000 4549281 CHANGE TR TO: 021307559 CHANGE ACCT NBR TO: 1111111111 TOTAL CORRECTIONS: 1 SAMPLE ITEMS RETURNED: III. ITEMS RETURNED - THIS REPORT LISTS THE RETURN ITEMS PROCESSED TODAY. THEY WILL BE REFLECTED ON TODAYS SETTLEMENT. --------------------------------------------------------------------------------------------------------------------------------- FILE REFERENCE EFF DATE COMPANY NAME COMPANY ID ENTRY DSCP. 20072840342 07-10-XX M&T BANK 00-0000000 T3000 ACH --------------------------------------------------------------------------------------------------------------------------------- RETURN TRANSIT- ACCOUNT NUMBER/ REASON TC AMOUNT INDIVIDUAL NAME/ID ROUTING REFERENCE # R03 22 $2,064.00 CUSTOMER SAMPLE 2 031101143 2000000000 1854040221 (5371486) R03 -NO ACCT/CANNOT LOCATE - M&T BANK T3000 ACH $2,064.00 CREDITS NUMBER OF CREDITS: 1 NUMBER OF CREDIT PRENOTES: 0 15

SAMPLE ADJUSTMENT ACTVITY AFFECTING SETTLEMENT TODAY: IV. ADJUSTMENT ACTIVITY AFFECTING SETTLEMENT TODAY - THIS SECTION LISTS ALL ADJUSTMENTS TO YOUR ORIGINATED ACH ENTRIES THAT AFFECT THE SETTLEMENT TO YOUR ACCOUNT TODAY. FILE REF. # EFF DATE COMPANY NAME COMPANY ID ENTRY DESC BATCH # 20072850252 7-10-XX ABC COMPANY 0000000000 PAYMENTS 0001 ---------------------------------------------------------------------------------------------------------------------------------- DETAIL REVERSAL REFERENCE TC TR ACCOUNT NUMBER AMOUNT CUSTOMER SAMPLE 3 (5969346) 22 055002707 3000000000 $20,000.00 0-16-07 - ACTIVITY DATE ---------------------------------------------------------------------------------------------------------------------------------- TOTAL CREDITS REVERSED= 1 ADJUSTMENT SUMMARY FOR FILE: 20072850252 (EXCLUDING REVERSALS) DEBITS CREDITS ADDS + $.00 $.00 CHANGES + $.00 $.00 CHANGES - $.00 $.00 DELETES - $.00 $.00 ADJUSTMENTS + $.00 $.00 SAMPLE SETTLEMENT RECONCILIATION FOR TODAY: V. SETTLEMENT RECONCILIATION FOR TODAY - THIS SECTION LISTS THE SETTLEMENT CHARGES TO BE DEBITED/CREDITED TO YOUR ACCOUNT TODAY. FILE COMPANY REFERENCE NAME APPLICATION ---------------------------------------------------------------------------------------------------------------------------------- 20072890028 ABC COMPANY INTERNAL DEBIT AMOUNT CREDIT AMOUNT ORIGINAL FILE/BATCH AMOUNT: $11,367,790.15 $.00 ADJUSTMENT ACTIVITY, DETAILED IN SECTION IV: + $.00 + $.00 SETTLEMENT TO BE DEBITED/CREDITED TO YOUR ACCOUNT TODAY: $11,367,790.15 $.00 16

APPENDIX B 17

ACH REVERSAL/ DELETION REQUEST FORM Requests made after 4:00 pm EST will be considered to have been received on the next business day. Instructions for completing this form are found on the following page. NOTICE: The NACHA Operating Rules require Originators who transmit reversing entries to correct erroneous credit or debits to notify the Receiver that the reversal is being transmitted, including the reason for the reversal, no later than the settlement date of the reversing entry. M&T can request a reversal from the Receiving Bank; however, the Receiving Bank is not obligated to honor the request. Fax to: 716-848-3310 Attn: Treasury Management and Merchant Customer Service, Buffalo, NY SECTION 1. COMPANY INFORMATION Date: / / Company Name: Contact Name: Phone: ( ) Authorized Signature: Fax: ( ) SECTION 2. ITEM REVERSAL/DELETION Individual Name: Individual ID #: Account #: Amount: $ Transit Routing #: Effective Date: / / SECTION 3. BATCH REVERSAL/DELETION SECTION 4. FILE REVERSAL/DELETION Batch Amount: $ Batch Effective Date: / / Process Date: / / File Amount:$ Effective Date: / / Process Date: / / SECTION 5. FOR ACH OPERATIONS USE ONLY Date/Time Request Received: / / : Completed by: Reviewed by: Batch #: File #: Item PAR #: Settlement: Generated Manual Confirmed by: CLIENT CONFIRMATION Date Request Completed: / / Item Already Returned On: / / Action Taken: Deleted Reversed 18

The ACH Recovery of Funds Request form is designed to assist you with requests for special handling of previously originated erroneous entries or files that have been submitted to M&T for processing. The ACH Operations Department will delete the transactions if these items have not been released for their destination. If the items have already been released, M&T will create a REVERSAL transaction (e.g., the opposite of your original entry) on your behalf to recover/disburse funds. Reversals should be requested no later than five (5) business days after settlement date. It should be noted that these entries are done on a best effort basis and are provisional. The receiving banks may not process all of the reversal transactions and some reversal transactions might be returned. The Receiving Bank is not obligated to honor M&T s request. This form must be submitted along with a letter stating our request on company letterhead signed by an authorized company signer. SECTION 1. COMPANY INFORMATION All fields in this section must be completed. You may choose to take the form and type in the information (except for the signature) and make copies so that you do not have to complete this part of the form every time it is used. SECTION 2. ITEM REVERSAL/DELETION Individual Name: Name of the employee or client for which the reversal or deletion is requested. Individual ID#: ID number used to identify the individual listed on the request. Account #: The account number for the individual listed on the request. Amount: The amount of the transaction as it appears in the file sent to M&T. Transit Routing #: The bank routing number of the receiving bank as listed in the files sent to M&T. Effective Date: The date the transaction will post as indicated in the batch header record sent to M&T. SECTION 3. BATCH REVERSAL/DELETION Batch Amount: The amount of a batch to be reversed/deleted. Batch Effective Date: The date assigned for the transactions in the batch to be posted to receiving accounts. Process Date: The date the file containing the batch to be reversed/deleted was sent to M&T for processing. SECTION 4. FILE REVERSAL/DELETION File Amount: Amount of the file to be reversed/deleted. File Effective Date: The effective date of the transactions included in the file to be reversed/deleted. Process Date: The date the file was sent to M&T for processing. SECTION 5. CUSTOMER CONFIRMATION ACH Support Services will process the request and the actions taken will be recorded in the Customer Activity Report. If the item was already returned, ACH Operations will notify the client by fax confirmation. Date Request Completed: The date the exception request was completed. Action Taken: Indicated the action taken whether deleted or reversed. Item Already Returned: This item has already been returned by the RDFI. No need to reverse the item. Once the request form is completed, please fax it to us at 1-716-848-3310, Attn: Treasury Management and Merchant Customer Service, Buffalo, NY. 19

APPENDIX C 20

SUBSECTION 5.5.4 Entry Detail Record Format for Returns RETURNS ENTRY DETAIL RECORD I. FIELD 1 2 3 4 5 6 7 8 9 10 11 DATA ELEMENT NAME RECORD TYPE CODE TRANSACTION CODE RECEIVING DFI IDENTIFICATION/ OGO IDENTIFICATION CHECK DIGIT DFI ACCOUNT NUMBER AMOUNT INDIVIDUAL IDENTIFICATION NUMBER/ IDENTIFICATION NUMBER/ CHECK SERIAL NUMBER INDIVIDUAL NAME/ RECEIVING COMPANY NAME DISCRETIONARY DATACARD TRANSACTION TYPE CODE ADDENDA RECORD INDICATOR TRACE NUMBER Field Inclusion Requirement M M M M R M O R R/M M M Contents 6 1 2 3 4 5 6 7 1 8 Numeric Length 1 2 8 1 17 10 15 22 2 1 15 Position 01-01 02-03 04-11 12-12 13-29 30-39 40-54 55-76 77-78 79-79 80-94 NOTE: For Return Entries, each field of the Entry Detail Record remains unchanged from the original entry, unless otherwise noted. 1. Changed to the appropriate Return Entry Transaction Code. 2. Changed to the Routing Number of the institution receiving the Return Entry (i.e., the ODFI of the original entry). 3. Changed to the Check Digit calculated according to NACHA standards and based on the Routing Number contained in Positions 04-11. 4. Blank for Converted Return Entries (RETs). 5. For the return of an outbound cross-border entry originated by a U.S. ODFI, this amount will be different from the amount reflected in the original forward entry if the exchange rate is different at the time of the return. 6. For CIE and MTE entries, positions 40-54 are used for a 15-character Individual Name, and positions 55-76 are used for a 22-character Individual Identification Number. 7. For SHR and POS return entries, this field (positions 77-78) is mandatory and contains the Card Transaction Type Code (positions 77-78) of the original entry. 8. Changed to the Trace Number is assigned by the institution preparing the Automated Return Entry or for which the converted Return Entry (RET) is being generated. This Entry Detail Record is to be used for PPD, CCD, CIE, MTE, SHR, POS Transactions. 21

SUBSECTION 5.5.5 Addenda Record Format for Returns (Note: This format is not for use with CBR or PBR Returns.) RETURNS ADDENDA RECORD II. FIELD 1 2 3 4 5 6 7 8 DATA ELEMENT NAME RECORD TYPE CODE ADDENDA TYPE CODE RETURN REASON CODE ORIGINAL ENTRY TRACE NUMBER DATE OF DEATH ORIGINAL RECEIVING DFI IDENTIFICATION ADDENDA INFORMATION TRACE NUMBER Field Inclusion Requirement M M M M O R O M Contents 7 99 1 2 3 Length 1 2 3 15 6 6 44 44 Position 01-01 02-03 04-06 07-21 22-27 28-35 36-79 80-94 1. Copy data from positions 80-94 of the Entry Detail Record. 2. To be used only with Return Code R14 or R15. 3. Copy data from positions 04-11 of the original Entry Detail Record. 22

SUBSECTION 5.5.1 Company/Batch Header Record Format for Returns RETURNS COMPANY/BATCH HEADER RECORD III. FIELD 1 2 3 4 5 6 7 8 9 10 11 12 13 DATA ELEMENT NAME RECORD TYPE CODE SERVICE CLASS CODE COMPANY NAME COMPANY DISCRETIONARY DATA COMPANY IDENTIFICATION STANDARD ENTRY CLASS CODE COMPANY ENTRY DESCRIPTION COMPANY DESCRIPTIVE DATE EFFECTIVE ENTRY DATE SETTLEMENT DATE (JULIAN) ORIGINATOR STATUS CODE ORIGINATING DFI IDENTIFICATION BATCH NUMBER Field Inclusion Requirement M M M O M M M O R Inserted by ACH Operator M M M Contents 5 1 2 3 Numeric 4 Alphanumeric 5 6 Length 1 3 16 20 10 3 10 6 6 3 1 8 7 Position 01-01 02-04 05-20 21-40 41-50 51-53 54-63 64-69 70-75 76-78 79-79 80-87 88-94 NOTE: For Return Entries, each field of the Company/Batch Header remains unchanged from the original entry, unless otherwise noted. 1. Contains 200 for Converted Return Entries (RET). 2. Contains RET for Converted Return Entries. 3. May contain the identification of the ACH Operator converting the entry. 4. Changed to reflect the Originator Status Code of the institution initiating the Return Entry (i.e., the RDFI of the original entry). 5. Changed to reflect the Routing Number of the institution initiating the Return Entry (i.e.,. the RDFI of the original entry). 6. Changed to the batch number assigned by the institution preparing the Automated Return Entry or the ACH Operator generating the Converted Return Entry (RET). 23

SUBSECTION 5.5.3 Corporate Entry Detail Record Format for Returns RETURNS CORPORATE ENTRY DETAIL RECORD IV. FIELD 1 2 3 4 5 6 7 8 9 10 11 12 13 DATA ELEMENT NAME RECORD TYPE CODE TRANSACTION CODE RECEIVING DFI IDENTIFICATION CHECK DIGIT DFI ACCOUNT NUMBER TOTAL AMOUNT IDENTIFICATION NUMBER NUMBER OF ADDENDA RECORDS RECEIVING COMPANY NAME/ID NUMBER RESERVED DISCRETIONARY DATA ADDENDA RECORD INDICATOR TRACE NUMBER Field Inclusion Requirement M M M M R M O M R N/A R M M Contents 6 1 2 3 Blank Alphanumeric 4 Length 1 2 8 1 17 10 15 4 16 2 2 1 15 Position 01-01 02-03 04-11 12-12 13-29 30-39 40-54 55-58 59-74 75-76 77-78 79-79 80-84 NOTE: For Return Entries, each field of the Corporate Entry Detail Record remains unchanged from the original entry, unless otherwise noted. 1. Changed to the appropriate Return Entry Transaction Code. (See Transaction Codes under currently assigned Code Values in Appendix Two.) 2. Changed to the Routing Number of the institution receiving the Return Entry (i.e., the ODFI of the original entry). 3. Changed to the Check Digit calculated according to NACHA standards and based on the Routing Number contained in positions 04-11. 4. Changed to the Trace Number assigned by the institution preparing the Automated Return Entry, or for which the Converted Return Entry (RET) is being generated. This Entry Detail Record is to be used for CTX transactions only. 24