Overview of Funds Flow
- Treasury Prime receives a payload that describes a remote check deposit. This payload includes image data of both the front and back of the check, as well as metadata on the originating account and the amount being transferred to the depositor. Upon receiving this data, Treasury Prime records a
created_attimestamp on the deposit. - Treasury Prime sends the received data about the check to a third-party provider. The provider then conducts various validation checks on the data, including OCR of the check image, verification of the accounts on the check, and performing a fraud assessment. Based on the results of these checks, the checks are categorized into one of three statuses:
error,submitted, orpending. - When checks are submitted, Treasury Prime generates an X9 report and sends it to our partner bank. The bank uses this report to make funds available to a per-fintech RDC-sweep account. It is crucial that this report includes a one-to-one mapping from the Treasury Prime Check Deposit object to the release of actionable bank funds.
- Treasury Prime offers an interface for fintech companies to make decisions on pending checks and determine whether to proceed with a deposit or not. This interface allows deposits to be moved from the pending status to either submitted or error status. It is important to note that deposits must transition from the pending status to their next status in accordance with the schedule outlined in Regulation CC, which governs when and how consumers gain access to their deposits.
- Once a day at a specific time (see funds release below), Treasury Prime releases funds for all submitted checks. These funds are drawn from the fintech’s RDC-sweep accounts. This process must be conducted in compliance with Regulation CC and utilizes the created_at date from the first step. After 5 business days, submitted checks are transitioned to a sent status. It is imperative that the transfers from the RDC-sweep account do not fail due to insufficient funds (NSF).
- If deposits are returned, the partner bank will receive a notification that a check has been returned. Upon receiving the notification, they will withdraw funds from the RDC-sweep account associated with the returned deposit. Similarly, it is important that this transfer does not fail due to insufficient funds (NSF). Once the funds have been withdrawn, the partner bank notifies Treasury Prime about the returned deposit. We then reverse the credit to the ledger account and transfer the funds to the RDC-settlement account. The notification from the partner bank must include a one-to-one mapping of the clawed back funds to the Treasury Prime check deposit object.
- Every day, at a mutually agreed-upon time with the partner bank, Treasury Prime reconciles the RDC-sweep accounts of each fintech. This process ensures that all deposits and returns are properly accounted for, either by the fintech’s loss-reserve account or otherwise. If any alerts are necessary to inform the fintech, bank, or Treasury Prime about the reconciliation, they are addressed during this step.
Bank Inputs
| Account needed | Description |
|---|---|
| RDC settlement accounts | Each fintech enabled for RDC will have its own RDC specific settlement account. |
| FBO Account | Need for end-to-end testing purposes. Once FBO is opened, TPrime will create a test ledger for testing (we will deposit funds in the ledger account). |
| X9 File Validation | Treasury Prime will provide each bank with an example X9 file. Each bank will need to validate that it is sufficient for them. This file is delivered to a predefined SFTP location. |
| Returned Checks: Reporting Requirements | Each bank must provide Treasury Prime with a report of all returned checks. The report should be formatted as a CSV file and delivered to a predefined SFTP location. |
Loss Reserve requirements
Per-fintech RDC-sweep accounts must have the ability to go negative when releasing or returning funds. This reconciliation process will be performed daily, comparing it to the fintech’s loss reserve account.Full amount deposited with holds
Treasury Prime will transfer the full amount of a deposit on the first business day and place a hold for the remaining amount that is not yet available, as required by Regulation CC. This ensures that the current and available balances on ledger accounts receiving check deposits align with what consumers expect from other banking interfaces. Treasury Prime will make use of thereleased_amount that is currently logged on each deposit row, such that there is always a credit for the total amount of a deposit, and until full release matches a hold for the amount minus released_amount.
Managing deposits using the Treasury Prime API
Treasury Prime will offer a solution for fintechs to determine the status of pending checks. This process entails making a synchronous call to the third-party provider. If the response is successful, we will update the deposit status in our system. If check deposits are not determined within one business day from theircreated_at date, they will be automatically rejected. This measure is in place to prevent deposits from remaining open and causing banks or fintechs to violate Regulation CC.
Easily Accessible Description of Funds Release
Each partner bank will adhere to a standardized funds release schedule that can be referenced by Treasury Prime. This description should be accessible to all parties involved (Treasury Prime, bank, and fintech). Please refer to Treasury Prime’s standardized RDC schedule provided below as an example:| Bank Name | Sesame Street Bank |
|---|---|
| Business Day Cutoff Time | 4 p.m. Eastern Time |
Release schedule for remote deposit of all checks per account
| Business Day 0 | $0 |
|---|---|
| Business Day 1 | Up to $225 |
| Business Day 2 | Up to $5525 |
| Business Day 5 | All remaining |