Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What system is known for its role in electronic funds transfer in the US?

1. Wire Transfer System

2. Automated Clearing House (ACH)

3. Direct Bank Transfer

4. Check Clearing House

The correct answer is: Automated Clearing House (ACH)

The Automated Clearing House (ACH) is a financial network that facilitates the electronic transfer of funds between bank accounts in the United States. This system allows for the automated movement of money through batch processing, which is particularly useful for handling transactions like direct deposits, bill payments, and interbank transfers. The ACH network efficiently processes a large volume of transactions, typically on a scheduled basis rather than in real-time, making it a cost-effective option for many types of electronic funds transfers. This system is governed by rules established by the National Automated Clearing House Association (NACHA), ensuring consistency and security in electronic transactions. In contrast, while wire transfer systems also facilitate electronic funds transfers, they typically involve real-time processing and higher fees. Direct bank transfers, although a method of moving money from one account to another, are not a specific system but rather a general term. Check clearing houses deal with the processing of paper checks rather than electronic transfers and have become less significant with the rise of electronic payment methods.