Lesson 7: NOCs and Process Reports

Notification of Change (NOC)

The prenotification (prenote) process was covered in Lesson 3 when the initial direct deposit setup is processed. When a prenote is sent to the payee’s receiving depository financial institution (RDFI) and the account information is not valid, or the account is closed, or for other reasons, the RDFI returns an NOC or electronic message to the Comptroller’s office through the ACH network. Reasons an NOC may be received include:

• The account information is incorrect.
• The account is closed or frozen.
• The payee is deceased.

If account information is incorrect, the correct information must be provided in the NOC if the account is still active. See NOC Reason Codes in TexPayment Resource for the list of codes. The three-character NOC reason codes prefixed with a:

• C (CXX) are used to respond to a prenote with zero funds.
• R (RXX) are used to respond to a returned or rejected payment with funds.

Automated NOC Process

The Comptroller’s automated NOC process compares the payee’s direct deposit information in TINS to the information defined as invalid on the NOC before TINS determines if direct deposit will be changed or canceled. An NOC may change one, a combination of, or all three fields — routing number, account number and/or account type.

If …	Then …
The invalid information on the NOC matches TINS	The direct deposit is changed with the correct account information provided on the NOC. The three-day prenote period is bypassed and direct deposit is effective that day.
The invalid information on the NOC does not match TINS or the NOC does not provide the correct account	Direct deposit is canceled.
The NOC indicates the account is closed, frozen or the payee is deceased	Direct deposit is canceled.

The custodial agencies’ daily direct deposit process reports include the NOC changes and cancellations. The custodial agency must notify the payee of any TINS changes or cancellations.

When an NOC changes or cancels the direct deposit, PMTHIS displays those actions, the description of the action based on the NOC and the NOC reason code. In the following example, PMTHIS shows that an NOC was received with reason code C01=Incorrect Account Number, which resulted in the account number change.

Example – PMTHIS With a Prenote NOC

PMTHIS.1XXXXXXXXX6                                                    MM/DD/YY

  TRANS     TRANS                                  MAIL INPUT  OPERATOR
  DATE      DESCRIPTION                  DLN       CODE SOURCE   ACID   EXCEP  
  --------  -----------------------   -----------  ---- ------ -------- -----
  MM/DD/YY  D/D BANK ACCT. NO. CHANGE SYSTEM GEN   000   SYS   NOC-C01
  MM/DD/YY  D/D BANK ACCT. NO. CHANGE EXTERNAL     000   XXX   TINX123
  MM/DD/YY  DIR DEP EFFECTIVE DATE    SYSTEM GEN   000   SYS 
  MM/DD/YY  DIRECT DEPOSIT SETUP      EXTERNAL     000   XXX   TINX123
  MM/DD/YY  MAIL CODE SETUP           EFT          000   XXX
  MM/DD/YY  MASTER ACCOUNT SETUP      EFT                XXX
  




 END OF DISPLAY - PF3=QUIT, PF4=INQMEN

Next: Direct Deposit Process Reports