Originating Depository Financial Institution or ODFI is a banking term in the United States used in connection with

ACH Network In the United States, the ACH Network is the national automated clearing house (ACH) for electronic funds transfers established in the 1960s and 1970s. It is a financial utility owned by US banks, and is one of the largest payments networks i ...

(ACH). In the ACH flow, the ODFI acts as the interface between the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...

or ACH network and the originator of the transaction. The ODFI warrants to the ACH network that the transactions it transmits to the network comply with the rules. The

depository institution Colloquially, a depository institution is a financial institution in the United States (such as a savings bank, commercial bank, savings and loan associations, or credit unions) that is legally allowed to accept monetary deposits from consumer ...

that is a member of ACH is usually a

bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

or other

financial institution A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial ins ...

which is initiating a payment on behalf of its client. This is different from check processing in which the paying bank on which the check is drawn warrants that the transaction is in compliance.

References

Banking terms {{US-bank-stub

See also

References