TN 74 (04-24)

GN 02408.645 Debiting the FI’s Account for EFT Reclamations

Effective January 2, 2008, the Department of the Treasury (Treasury) imposed a three (3) year time limit for Federal agencies to submit final debits (i.e., ACH reclaims) of a Financial Institution's (FI) Federal Reserve account via the FMS-135, Request for Debit. An ACH reclaim represents a debit against an FI for certain liability on payments disbursed after the death of a beneficiary. Agencies have three years from the date of the FMS-133, Notice of Reclamation to submit ACH reclaims via the FMS-135 to Treasury's Philadelphia and Kansas City Regional Financial Centers. Items older than three years are rejected and not processed.

A. Process when determining the amount to be debited

Treasury determines the amount to be debited from the FI's reserve account at the Federal Reserve Bank (FRB).

1. FI has returned full amount of incorrect payments

When the FI has returned the full amount of the incorrect payments issued after death, Treasury closes the case and does not instruct FRB to debit any funds from the FI’s reserve account.

2. FI has limited its liability

When the FI has limited its liability but has not returned the full amount of all outstanding payments, Treasury does the following:

  • Totals the amount already paid by the FI or survivors;

  • Title II only – Passes to SSA the name and address of the last withdrawers, so we can attempt to collect as much as possible of the outstanding total;

  • Adds the amount SSA has collected from the withdrawers to the total amount returned by the FI;

  • Subtracts the combined total from the amount of the FI’s liability; and

  • Computes the remainder as the amount to be debited.

3. FI has not limited its liability

When the FI has neither returned all incorrect payments nor limited its liability, the amount to be debited from the FI’s reserve account at FRB is the outstanding total as shown on the Notice of Reclamation.

B. Process when FRB debits the FI’s account

After determining the amount to be debited, Treasury sends a Request for Debit (FMS-135) to the FI’s servicing Federal Reserve Bank (FRB). FRB does the following:

  • Takes the money from the FI’s reserve account (or its correspondent’s reserve account) at FRB;

  • Notifies the FI of the action; and

  • Returns the reclaimed funds to Treasury.

C. Process when Treasury returns the funds to SSA

Treasury returns the funds to SSA, unless they receive a protest from the FI that needs investigation. Treasury forwards the FMS-135 to SSA for action.

1. Title II

Technicians must post the amount of the credit on he FS-135 to the Payment History Update System (PHUS) by completing an input on the SSA-4208. The input on the SSA-4208 will reduce the amount of the funds on the Special Payment Amount (SPA). If posting does not take place, a reject goes to the PC. The PC must then resolve the reject and key the return using the SSA-4208. For SSA-4208 processing instructions, see GN 02408.626C and SM 00609.865.

2. Title XVI

The funds are automatically posted. Treasury sends the Division of Benefit Certification and Systems Analysis (DBCSA) an FMS-135 to notify SSA of the reclamation. If the funds have not posted, DBCSA codes a 3969 and gives it to ODIO for input. The information posts to the SSR OPRR field as a refund or an S posts to Payflag 3 for the check in PMTH.

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GN 02408.645 - Debiting the FI’s Account for EFT Reclamations - 04/01/2024
Batch run: 04/01/2024