Green Book
Categories: Banking, Regulations
The Green Book (not to be confused with the 2018 movie Green Book) is a full-fledged guide on how to process ACH payments and collections for financial institutions.
The ACH (Automated Clear House) payment system is how the U.S. does free electronic transferring of funds. If you’ve ever transferred money from one US bank account to another just using the routing and account numbers (not through some third party provider), that payment went through the ACH system.
The Green Book is basically a decision tree for banks doing these fund transfers. It tells them all the scenarios, and what’s to be done or who is to be contacted in every case, even the rare ones.
Truth be told, the ACH system is...well, a bit slow and outdated. Many countries around with world, including ones with way lower GDP per capita, have instant electronic transfers, while ACH payments take 3-5 business days. It’s because the ACH system was set up a long time ago when electronic payments systems were difficult, and we’re still using a lot of the old processes...which is all detailed in the Green Book.