ACH Federal Government Reclamations, Plus Guidance on Misdirected Payments and DNE’s (Death Notification Entries)

Overview:

The landscape of ACH Federal Government Reclamations is undergoing significant transformation, making it imperative for financial institutions to stay informed and proactive. As regulations evolve and technology reshapes how federal payments are processed, 2025 marks a crucial year for ensuring compliance, improving operational efficiency, and minimizing financial risks associated with misdirected payments and Death Notification Entries (DNEs).

The U.S. Department of the Treasury, Bureau of the Fiscal Service, Defense Finance and Accounting Service (DFAS), and the Federal Reserve Bank of Philadelphia are leading efforts to modernize the reclamation process, focusing on streamlining operations through digitalization. One of the most significant advancements is the transition to electronic processing of reclamation notices, requiring financial institutions to submit all responses through the Automated Reclamation Processing System (ARPS) via Treasury’s Pay.gov portal. This change, aimed at reducing manual paperwork and increasing processing speed, is not just a recommendation—it is now a requirement. As a result, institutions must ensure their internal teams are fully prepared to handle this shift effectively.

At the core of ACH Federal Government Reclamations are two persistent challenges: misdirected payments and Death Notification Entries (DNEs). Misdirected payments occur when funds are sent to the wrong account due to incorrect information, fraud, or system errors. With the growing reliance on digital transactions, these errors have become more costly and complex to resolve. Government agencies are implementing enhanced data validation measures to minimize these occurrences, and financial institutions are expected to refine their internal verification processes to align with these stricter standards.

Similarly, DNEs present a significant issue, as federal benefits often continue to be disbursed after a recipient’s death due to delayed reporting. The 2025 updates to Chapter 5 of the Green Book introduce stricter timeframes for handling DNEs and mandate specific return reason codes that must be used. Failing to process these correctly could result in compliance violations and financial liability for financial institutions. As scrutiny increases in this area, it is essential to understand the exact steps required when receiving a Death Notification Entry.

Another key area of concern in 2025 is the distinction between commercial and federal government reclamations. While Nacha Operating Rules serve as the foundation for ACH transactions, federal government payments introduce unique exceptions, detailed in the Green Book. Understanding when standard Nacha rules apply and when federal regulations override them is critical for ensuring compliance and avoiding unnecessary liability. This session will provide a side-by-side comparison of commercial versus federal government reclamations, helping attendees navigate these complex differences.

Beyond compliance, the broader industry trends of automation, digital security, and fraud prevention are also shaping how ACH transactions are processed in 2025. As financial institutions increasingly rely on automated systems to handle federal payments, the risk of fraud and data breaches has also risen. There is a growing emphasis on strengthening security protocols, improving fraud detection measures, and enhancing collaboration between government agencies and financial institutions. Staying ahead of these developments is crucial, as regulatory bodies will expect institutions to adopt more rigorous internal controls.

By attending this session, financial institutions will gain a comprehensive understanding of ACH Federal Government Reclamations and the specific challenges that 2025 presents. The session will provide clarity on processing misdirected payments and DNEs, highlight the latest updates to the Green Book, and explain the evolving role of automation in the reclamation process. Attendees will leave with actionable insights into maintaining compliance, minimizing risks, and improving operational efficiency in an increasingly digital financial environment.

Areas covered in the session:

• Chapter 5 of the Green Book has been updated making it mandatory for Financial Institutions to respond to all reclamations must be submitted through the Automated Reclamation Processing System (ARPS)
• Detailed processes on handling Death Notification Entries (DNE’s)
• Timeframes to return ACH Entries for deceased accountholders.
• Describe Return Reason Codes when returning benefit payments for deceased account holders.
• How to handle and process Federal Government Reclamations
• Timeframes for responding to Government Reclamations.
• Difference between handling Commercial Reclamations and Federal Government Reclamations (side-by-side comparison)

Why should you attend?

ACH Federal Government Reclamations are becoming more complex, with 2025 bringing significant regulatory changes, digital transformation, and stricter compliance requirements. Financial institutions must stay ahead of these developments to avoid financial risks, regulatory penalties, and operational inefficiencies.

This session will provide a clear roadmap for navigating ACH reclamations, misdirected payments, and Death Notification Entries (DNEs) under the latest guidelines. With the mandatory shift to electronic processing through the Automated Reclamation Processing System (ARPS) on Treasury’s Pay.gov portal, financial institutions must be prepared to handle these transactions efficiently. The session will also break down the latest Green Book updates, clarifying how federal rules differ from standard Nacha Operating Rules and what financial institutions need to do to stay compliant.

Beyond compliance, attendees will gain insights into fraud prevention, enhanced data validation processes, and security measures that are shaping ACH reclamations in 2025. This training will help institutions mitigate risks, streamline their operations, and avoid costly mistakes when handling government benefit payments.

Who will benefit?

This session is designed for professionals responsible for managing ACH transactions, ensuring regulatory compliance, and mitigating financial risks related to federal government payments. Those include:

• Treasury Managers
• ACH Operations Specialists
• Bank Compliance Officers
• Risk and Fraud Management Professionals
• BSA/AML Officers
• Electronic Payments Managers
• Financial Institution Executives
• Internal Auditors
• Account Reconciliation Specialists
• Banking and Finance Professionals Handling ACH Transactions
• Operations Managers in Financial Institutions
• Payment Compliance Analysts
• Banking Risk and Controls Professionals
• Regulatory Affairs Specialists in Banking and Finance