Answer:
First, make sure that the stop order in question is subject to Reg E. If the transaction is a pre-authorized EFT from the consumer's account, Reg E's stop order provision will apply. Otherwise (if it's an individual, non-recurring transfer, or a transfer from a non-consumer account, for example), Reg E doesn't provide a stop payment right. In that case, the ACH rules on stop orders would apply. If the consumer is entitled to a Reg E stop payment, it's valid without an expiration date. However, it only applies to an individual transfer in a series of pre-authorized transfers. It continues to apply to that transfer if it comes in and is rejected, so you should not lift it just because you've bounced it once (even though the NACHA rules say the stop is dead at that point).
If the consumer tells you that he or she has revoked the underlying authorization for the pre-authorized EFTs, you must stop all transfers received under that authorization, subject to your right to require your customer to document the revocation in writing. If the consumer cannot document the revocation within 14 days, you can lift the general stop and accept entries again. The consumer, of course, can tell you to stop all transfers. That would be the equivalent to revocation of the authorization. You should insist that the consumer send the originator a revocation and provide you a copy.
First published on BankersOnline.com 2/18/08
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