Policy Overview

The Country Bank of Needham’s Demand Deposit Account (DDA) verification policy establishes comprehensive procedures for validating external bank accounts linked to TCBON accounts. This policy ensures compliance with federal banking regulations, protects customer assets, and prevents fraudulent activities.

1. Scope and Applicability

This policy applies to:

• All new external account linkages
• Personal checking and savings accounts
• Business checking and savings accounts
• Joint accounts with proper authorization
• Trust accounts with verified documentation
• Re-verification of previously linked accounts as required

2. Eligible Account Types

The following DDA account types are eligible for verification:

3. Verification Requirements

All account verifications must meet the following requirements:

1. Account Ownership: The account holder name must match the TCBON account holder name exactly
2. Active Status: The external account must be in good standing with no restrictions
3. Sufficient Balance: Account must maintain minimum balance to receive deposits
4. Accessible: Account holder must have online or statement access to view deposits
5. US-Based Institution: Account must be held at a US financial institution
6. FDIC/NCUA Insured: Institution must be federally insured

4. Micro Deposit Procedures

Our standard micro deposit procedure includes:

• Two Separate Deposits: Two distinct amounts will be deposited to the external account
• Corresponding Withdrawal: A single withdrawal equal to the sum of both deposits will be processed
• Transaction Descriptors: Deposits will display as “TCBON VERIFY” or “COUNTRY BANK NEEDHAM VERIFY”
• Processing Window: 1-3 business days for deposit appearance
• Verification Window: Customer has 30 days to complete verification
• Attempt Limits: Maximum of 3 verification attempts before account lockout

5. Security Protocols

To maintain the highest security standards, we implement:

• 256-bit SSL encryption for all data transmission
• Multi-factor authentication for verification submission
• Real-time fraud monitoring and detection
• Automated validation of routing and account numbers
• IP address logging and geolocation verification
• Device fingerprinting for additional security
• Automated account lockout after failed attempts

6. Compliance Requirements

This policy ensures compliance with:

• NACHA Operating Rules: ACH network operational guidelines
• Regulation E: Electronic Fund Transfer Act requirements
• BSA/AML: Bank Secrecy Act and Anti-Money Laundering regulations
• OFAC: Office of Foreign Assets Control screening
• KYC Guidelines: Know Your Customer verification standards
• FFIEC Guidelines: Federal Financial Institutions Examination Council standards

Account Validation API Endpoints

For developers and institutional partners, TCBON provides RESTful API access to our account verification system.

1. Penny Test (Micro Deposit) Validation

The penny test validation initiates micro deposits to verify account ownership and status.

Example Request: Initiate Penny Test

POST /v2/validations/accounts HTTP/1.1
Host: api.thecountrybankofneedham.com
Authorization: Bearer YOUR_ACCESS_TOKEN
Content-Type: application/json

[
  {
    "requestId": "223e4567-e89b-12d3-a456-426614174000",
    "profileName": "verificationauth",
    "account": {
      "accountNumber": "12345",
      "financialInstitutionId": {
        "clearingSystemId": {
          "id": "122199983",
          "idType": "ABA"
        }
      }
    },
    "entity": {
      "individual": {
        "firstName": "Jane",
        "lastName": "Abbot",
        "fullName": "Jane Abbot"
      }
    },
    "transactions": []
  }
]

Response: Penny Test Acknowledgement

HTTP/1.1 200 OK
Content-Type: application/json

[
  {
    "requestId": "223e4567-e89b-12d3-a456-426614174000",
    "responses": [
      {
        "codes": {
          "verificationMicroDeposit": {
            "code": 8906,
            "message": "Initiated"
          }
        },
        "provider": "MICRODEPOSITS"
      }
    ]
  }
]

Response: Penny Test Validation Complete

[
  {
    "requestId": "10082023-TEST-MD-0001",
    "profileName": "verificationauth",
    "responses": [
      {       
        "codes": {
          "verificationMicroDeposit": {
            "code": 1006,
            "message": "Open Valid"
          } 
        },
        "provider": "MICRODEPOSITS",
        "details": {
          "providerResponse": {
            "retry-count": 0,
            "md-notification": "Validation Complete"
          }
        }
      }
    ]
  }
]

2. Challenge Test (Amount Verification)

The challenge test validates account access by verifying the customer can see and report the exact micro deposit amounts.

Example Request: Challenge Test with Deposit Amounts

POST /v2/validations/accounts HTTP/1.1
Host: api.thecountrybankofneedham.com
Authorization: Bearer YOUR_ACCESS_TOKEN
Content-Type: application/json

[
  {
    "requestId": "223e4567-e89b-12d3-a456-426614174000",
    "profileName": "verificationauth",
    "account": {
      "accountNumber": "12345",
      "financialInstitutionId": {
        "clearingSystemId": {
          "id": "122199983",
          "idType": "ABA"
        }
      }
    },
    "entity": {
      "individual": {
        "firstName": "Jane",
        "lastName": "Abbot",
        "fullName": "Jane Abbot"
      }
    },
    "transactions": [
      {
        "context": "DEPOSIT",
        "amount": {
          "amount": 0.03,
          "currency": "USD"
        }
      },
      {
        "context": "DEPOSIT",
        "amount": {
          "amount": 0.14,
          "currency": "USD"
        }
      }
    ]
  }
]

Response: Challenge Test Acknowledgement

[
  {
    "requestId": "223e4567-e89b-12d3-a456-426614174000",
    "profileName": "verificationauth",
    "responses": [
      {
        "codes": {
          "verificationMicroDeposit": {
            "code": 1006,
            "message": "Open Valid"
          },
          "authenticationMicroDeposit": {
            "code": 8006,
            "message": "Access Confirmed"
          }
        },
        "provider": "MICRODEPOSITS"
      }
    ]
  }
]

Response: Challenge Test “Ready for Validation”

[
  {
    "requestId": "10082023-TEST-MD-0001",
    "profileName": "verificationauth",
    "responses": [
      {       
        "codes": {
          "verificationMicroDeposit": {
            "code": 8906,
            "message": "Initiated"
          } 
        },
        "provider": "MICRODEPOSITS",
        "details": {
          "providerResponse": {
            "md-notification": "Ready for validation",
            "retry-count": 0
          }
        }
      }
    ]
  }
]

3. API Response Codes Reference

4. Required API Fields

To incorporate a challenge request into the micro-deposit request, include the following required fields:

5. Webhook Notifications

Configure webhook endpoints to receive real-time notifications for verification status changes:

• Deposit Initiated: Notification when micro deposits are sent
• Ready for Validation: Notification when deposits have posted
• Verification Complete: Notification when challenge test passes
• Verification Failed: Notification when challenge test fails
• Verification Expired: Notification when 30-day window expires

Protecting Your Account During Verification