R34

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High-Priority Return Code

This ACH return code indicates that federal or state regulatory authorities have imposed restrictions on the receiving bank's ability to participate in certain types of ACH transactions. Unlike account-specific issues, R34 represents institutional-level limitations where the bank may only be authorized to process certain classes of ACH entries or may have been temporarily restricted due to compliance, operational, or regulatory concerns.

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Error message: "The RDFI's participation has been limited by a federal or state supervisor."

What Causes ACH Return Code R34?

The R34 ACH return code means "Limited Participation DFI" and indicates that regulatory supervisors have restricted the receiving bank's participation in the ACH network. DFI stands for Depository Financial Institution, and "limited participation" means the bank cannot process all types of ACH transactions due to regulatory constraints imposed by federal or state banking authorities.

R34 returns occur when banks face regulatory restrictions that limit their ACH capabilities. This could be due to compliance issues, operational concerns, risk management requirements, or supervisory actions. The bank remains in the ACH network but can only handle specific types of transactions or must operate under certain constraints determined by their regulatory supervisor.

Can You Retry R34 Payments?

You cannot retry R34 payments using the same transaction format until you understand the specific limitations imposed on the receiving bank. You must contact the receiving bank directly to determine what types of ACH transactions they can accept, or obtain alternative banking information from your customer at a fully participating financial institution.

Common Causes

Federal or state banking supervisors imposed ACH participation restrictions

Bank can only process specific types of ACH transactions (not all SEC codes)

Regulatory compliance issues limiting the institution's ACH capabilities

Risk management constraints placed on the bank's electronic payment processing

Operational limitations imposed by banking authorities during examinations

Key Information

Return timeframe: Next file delivery time following processing

Regulatory restriction at the institutional level, not account-specific

Bank remains in ACH network but with limited transaction capabilities

Requires direct contact with RDFI to understand specific limitations

More common with smaller banks, credit unions, or specialized financial institutions

How to Respond to an R34 Code

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An R34 return indicates regulatory restrictions on the receiving bank's ACH participation, requiring direct communication with the bank to understand their specific transaction limitations and explore alternative solutions.

When Your Customer's Payment Fails

Contact the Receiving Bank Directly
Reach out to the customer's bank to understand what specific ACH transaction types they can and cannot process under their regulatory restrictions.
Identify the Transaction Type
Determine what SEC code or transaction format you attempted (CCD, CTX, PPD, etc.) to understand if an alternative format might be acceptable.
Ask Customer for Alternative Banking Information
If the receiving bank cannot process your transaction type, request updated banking details from a fully participating financial institution.
Work with Your Payment Processor
Consult with your ACH provider to understand if a different transaction format might be successful with this limited participation bank.

Email Template

Subject: Payment Processing Limitation - Alternative Banking Information Needed

Hi [Customer Name],

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We encountered a processing limitation with your bank that prevents us from completing your ACH payment. Your financial institution has regulatory restrictions that limit their ability to process certain types of electronic transactions.

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This is not related to your account status, but rather regulatory limitations placed on your bank by federal or state supervisors. To complete your payment, we have a few options:

We can work with your bank to determine if an alternative transaction format is acceptable
You can provide banking information from a different financial institution
We can explore alternative payment methods

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We'll contact you within 24 hours to discuss the best solution for completing your payment.

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[Your Company Name]

When Your Payment to Vendors Fails

An R34 return on vendor payments means the vendor's bank has regulatory restrictions limiting their ACH participation. This requires understanding what transaction types their bank can accept or obtaining alternative banking information.

Contact the vendor's bank directly to understand their specific ACH limitations and capabilities
Determine if a different ACH transaction format (SEC code) might be acceptable to their institution
Request alternative banking information from the vendor at a fully participating financial institution
Consider alternative payment methods like wire transfers or checks if ACH options are exhausted