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New National Automated Clearing House Association (“NACHA”) rule regarding International ACH transactions (“IAT”) effective September 18, 2009

As part of Frontier Bank DBA El Paseo Bank’s commitment to communicate important information to you in a timely manner, we would like to call your attention to a new National Automated Clearing House Association (“NACHA”) rule regarding International ACH transactions (“IAT”) effective September 18, 2009. This new rule applies to ACH electronic collection and payment activity that involves a financial institution outside of the territorial jurisdiction of the United States.

Under the new rule, all parties involved in a transaction must be identified, which requires additional information. Additionally, NACHA has created a new Standard Entry Class Code (“SEC”) for IATs. The new IAT code needs to be entered when originating applicable ACH transactions using the Ecorp ACH product. The new code replaces the current DEC codes, CBR (Corporate Cross-Boarder) and PBR (Personal Cross-Boarder).

We recommend you review your ACH originations prior to the implementation date to determine if any of them should be identified as ACH IAT entries. IAT transactions currently categorized as domestic could be considered IAT transactions under the new rule. IAT transactions require specific information to be included in IAT debits and credits, for example:

• Name and physical address of the originator
• Name and physical address of the receiver
• Account number of the receiver
• Identity of the receiver's bank
• Foreign correspondent bank name, bank ID number and bank branch country code

In addition to these seven (7) mandatory records, two (2) optional records are available for the purpose of sending payment information. Examples of optional records could include Invoice/Remittance data or other free-form content. Please ensure that you have the additional mandatory information available if IAT is required.

If any of your current ACH transactions fall within the definition of an IAT, please be aware that Frontier Bank DBA El Paseo Bank may, from time to time, need to temporarily suspend processing of an IAT for greater scrutiny or verification in accordance with OFAC requirements. This may affect settlement and/or availability of an IAT to your receiver.

For additional information regarding IAT transactions, please refer to the IAT Corporate Tool Kit published by NACHA at http://www.nacha.org/IAT_Industry_Information/. We strongly encourage you to review the IAT Corporate Tool Kit to assist you in evaluating the applicability of the IAT code to your ACH transactions. You will be responsible for determining if your transactions meet the new requirements; we cannot do it for you, but we are happy to help. Please be aware that you are subject to U.S. law, including OFAC-enforced sanctions, when initiating ACH entries.

Thank you for choosing Frontier Bank DBA El Paseo Bank. Should you have any questions, please contact the Central Operations Department at (760) 834-3492 Monday – Friday 8:30a.m. to 5:00p.m., Pacific Time.

Sincerely,

Andrew Montgomery
Chief Executive Officer