New York Codes, Rules and Regulations
Title 2 - DEPARTMENT OF AUDIT AND CONTROL
Chapter IV - Miscellaneous Rules
Part 102 - Recurring Wages And Salary Payments Through Financial Institutions By The Automated Clearing-house Method
Section 102.6 - Financial institutions
Current through Register Vol. 46, No. 12, March 20, 2024
(a) Regardless of whether it has executed a direct deposit of salary enrollment form, a financial institution's acceptance and handling of a payment issued pursuant to this Part shall constitute its agreement to the provisions of this Part.
(b) A financial institution in executing a direct deposit of salary enrollment form shall be responsible for:
(c) A financial institution receiving a payment shall credit the amount of such payment to the account indicated by the account information specified in the payment instructions. If the financial institution is unable to credit the amount of a payment to the account indicated by the account information in the payment instruction because such an account does not exist on its books, or because in processing the payment instruction it has reason to believe the account indicated by the account number information in the payment instruction is not the account designated by the recipient, it shall either:
A credit to any other account by a financial institution will constitute a breach of its warranty made by reason of subdivision (i) of this section.
(d) A financial institution shall promptly return to the State through the originating depository financial institution any payment received by such financial institution:
(e) A financial institution to which a payment is sent under this Part does not thereby become a State depositary and shall not advertise itself as one because of that fact.
(f) If any change in account numbers is made by a financial institution, the financial institution will be responsible to the recipient for any lost or late payment caused by the financial institution's actions in processing the change in accordance with applicable State and Federal statutes.
(g) Each financial institution by its action of handling a payment under this Part shall be deemed to warrant to the State that it has handled the payment in accordance with the requirements of this Part. If the warranty is breached, the financial institution shall indemnify the State for any loss sustained or liability incurred by the State, but only to the extent that such loss was the result of the breach. The State will give the financial institution prompt written notice of any claim of loss. This provision does not deny the financial institution the opportunity to cure the defect and to defend, settle or otherwise compromise the claim.
(h) At his sole discretion, the State Comptroller may terminate the participation in this program of any financial institution which the State Comptroller finds to be causing unacceptable administrative difficulties including but not limited to unreasonable delays in making recurring payments available to recipients. In the event termination is contemplated, the State Comptroller shall send to the financial institution by certified mail a notice of intention to terminate setting forth the facts and circumstances justifying termination of the financial institution's participation in this program. The financial institution shall have 30 days in which to respond in writing to the State Comptroller. If after considering the response of the financial institution, the State Comptroller determines that termination is proper, or in the event the financial institution fails to respond within 30 days, the State Comptroller shall send by certified mail a notice of termination to the financial institution. Such termination shall become effective 30 days after the date such notice is mailed.