Automated Check Deposit: Legal Obligation Review

New feature coming soon: This is currently in the beta testing phase.

As part of setting up Automated Check Deposit, please review this legal obligation for your organization. 


A. Law surrounding electronic check presentation: By law, you are required to let your donors/registrants know that their paper checks may be processed electronically. You do not need their written consent or signature, but you must notify them by sending out a special notification or by including a statement on your invoices or bill statements. While the NACHA operating rules do not prescribe specific notification language for the Originator; there are two notice requirements:

  • No notice shall be smaller than the smallest font used on the Originator’s document to their donor/prospect.
  • Clearly states receipt of their check authorizes an ACH transaction to their account in accordance with the check’s terms. 

Here is a suggested notification for Nonprofit and Charitable Originations: “When you donate (or make a payment) to our organization by check, you authorize us to electronically process your check using the information on your check. If we electronically process your check instead of depositing your check, the electronic debit to your checking account may be on the same day we receive the check by transmitting the amount of the check, routing and transit number and check number to your bank. Electronically processing your check makes us better stewards.” 

Or the condensed version of this same notice: “We may steward your resources by converting your check into an electronic deposit.” 

It is recommended you retain the checks in a secure location for at least thirty days before destroying them. 



B. Virtual Endorsement Feature (optional): Virtual Endorsement means you will not have to manually endorse the back of every check before scanning it; the Jack Henry software will do it for you. There is no fee for this service. 

In addition to the required information for an Automated Check Scanning virtual endorsement (date and ODFI name and routing number) there can be an additional three fields added by the church. Some examples are below: 

  • For Deposit Only
  • Pay to the Order of
  • Customer Display Name
  • Customer Legal Name
  • Customer DBA Name
  • Location Name
  • Settlement Account Number
  • Blank Line – By choosing the blank line, a user can enter up to 30 characters of free form text to appear in the endorsement. 

 

The first two choices will appear as is if selected for the virtual endorsement. If the other remaining choices are selected, the individualized information will appear. 

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