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Notification of Change (NOC) Entries for Federal Government ACH Payments

Notification of Change (NOC) is a method used by a financial institution to notify a Federal agency to correct or change account information in an entry the Federal agency processed through the ACH. For example, a routing number change resulting from the merging of two financial institutions may require one of the institutions to initiate an NOC to the respective Federal agency to make the appropriate RTN change to their recurring payment files. NOCs are used for Federal government (both civilian and military) payments that are made on a recurring basis. Examples include:

Conversely, NOCs should not be used in the following circumstances:

Under these circumstances, the recipient must complete a new Direct Deposit authorization.

Over the past several years, many financial institutions have been contacting SSA’s local offices directly to make changes to account information on recurring benefit payments. However, SSA does not have the resources to continue this exception process and will therefore have to discontinue these services immediately.  As a result, financial institutions wishing to make changes to account information of SSA recurring payments must begin using the NOC process in accordance with the National Automated Clearinghouse Association (NACHA) rules and guidelines prescribed in Treasury’s GreenBook, the Federal government’s guide for financial institutions processing Federal government ACH payments.

For more information on processing NOCs for Federal government payments, please visit the Green Book website

Treasury Rule on Garnishments

Here are a few reminders on the Treasury’s rule regarding the protection of federal benefits from garnishment that went into effect last year:

For example: A credit union receives a garnishment order against an account holder for $2,000. The credit union reviews the account that day and the opening balance is $1,000. The account review shows that two Federal benefit payments were deposited during the past 2 months totaling $2,500. Since the balance in the account at the open of business on the day the account was reviewed is less than $2,500, the credit union must protect the opening balance of $1,000 from the garnishment order.

Also check with your compliance or legal counsel on state law requirements as they pertain to garnishments, including what must be included in the Notice to Account Holder, whether their state law contains more protections, and how the state and federal laws relate to one another. For more information, refer to the Treasury’s Garnishment Guidelines available at http://www.fms.treas.gov/greenbook/guidelines_garnish0311.pdf.

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