What is the time frame for originating a file or single entry reversal after the settlement date of the transaction(s)?

The time frame for originating a file or a single entry reversal after the settlement date of the transaction is five banking days. This is consistent with the regulations governing ACH transactions, which stipulate that reversals must be initiated within five banking days of the original transaction date to ensure proper handling and compliance with the rules set forth by NACHA (the National Automated Clearing House Association).

A reversal is a method used to correct or reverse an erroneous transaction in the ACH system. By adhering to the five banking days rule, financial institutions can ensure that customers have a reasonable window to identify errors in their account and request corrections. This timeframe strikes a balance between providing consumers the ability to resolve issues promptly while also establishing a clear boundary for financial institutions' operational processes.

While longer time frames might seem beneficial for consumer protection, they could introduce risks and complications in transaction processing, liquidity management, and overall ACH system integrity. Thus, the five banking days period is well-aligned with the ACH operational framework.