Originating Depository Financial Institution or ODFI is a banking term in the United States used in connection with ACH Network (ACH). In the ACH flow, the ODFI acts as the interface between the Federal Reserve 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 that is a member of ACH is usually a bank or other financial institution 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.
- ^“ACH Network: How it Works”. nacha.org. NACHA. Retrieved 25 January 2015.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.