(a) A financial institution shall be responsible to the State for the collection of the total amount of all payments received after the death of the recipient or upon notification by the State that it has made any other erroneous payment to the recipient's account. This Part authorizes a financial institution to debit the account of the appropriate recipient, living or deceased, for the amount to be collected by the financial institution.

(b) For each type of erroneous payment, the State will send a notice of reversal to the financial institution via the Automated Clearing House (ACH). The State will enter pertinent payment information into the “ASK CHASE” on-line system. The entry will identify payments sent to the financial institution for credit to the account of the recipient which should be returned by the financial institution in the case of the death of a recipient or if the State has made an erroneous payment to the recipient's account.

(c) Upon receipt of the notice of reversal, the financial institution shall return to the State an amount equal to the overpayment or erroneous payment, if available, in accordance with the National Automated Clearing House Operating Rules, article II, section 2.4 and 2.5 of the 1997 ACH Rules.

(d) A financial institution that fails to timely comply with the collection procedures set forth in this section or the notice to account owners requirement of section 102.9 of this Part will be liable to the State for that portion which could not be collected due to the financial institution's negligence or failure to act timely.

(e) Immediately upon learning of the death of the recipient, regardless of whether there has been notification from the State, the financial institution shall return to the State any further payments received and notify the State of the death of the recipient in order that the above collection procedures can be commenced. See section 102.6(d)(1) of this Part.