'These rules show that financial institutions can come together through private-sector rulemaking to address practices that may result in harm to consumers.'
Herndon, Va. (PRWEB) August 26, 2014
NACHA —The Electronic Payments Association® today announced its voting membership approved two new amendments to the NACHA Operating Rules that will further improve ACH Network quality by reducing the incidence of ACH transactions that result in exceptions and returns. As components of NACHA’s long-term Risk Management Strategy, updated in 2012, the Rules amendments are part of NACHA’s ongoing efforts to maintain and improve the strength of the ACH Network for the consumers, governments, businesses and financial institutions that move their money via ACH.
“These rules show that financial institutions can come together through private-sector rulemaking to address practices that may result in harm to consumers,” said Janet O. Estep, president and CEO of NACHA. “In developing these rules, NACHA incorporated broad industry feedback and balanced differing perspectives from many parties. The rules represent workable solutions that can be implemented by financial institutions.”
The “ACH Network Risk and Enforcement” Rule improves NACHA’s ability to identify and enforce the Rules against “outlier” Originators that may be responsible for the highest, and most disproportionate levels of exceptions and returns, which impose costs on Receiving Depository Financial Institutions (RDFIs) and can impact their customers. This Rule establishes an inquiry process that allows NACHA to research the facts behind an Originator’s ACH activity. The Rule also lowers the existing return threshold for unauthorized transactions, and expands NACHA’s authority to enforce the Rules related to unauthorized transactions. Additionally, the Rule defines permissible practices for use of the ACH Network to collect transactions returned for insufficient funds and other reasons. Standard information required to be included in a “reinitiated” transaction will better enable financial institutions’ stop payment systems to work efficiently.
The “ACH Network Quality” Rule defines the methodology for establishing an Unauthorized Entry Fee to be paid by an Originating Depository Financial Institution (ODFI) to a RDFI for the return of an unauthorized transaction. An Unauthorized Entry Fee will provide an incentive for ODFIs to implement processes and tools with their Originators that reduce the number of unauthorized transactions. The fee also will provide partial cost recovery to RDFIs for their costs in handling unauthorized transactions.
In preparation for implementation of these rules, NACHA will provide education and resources to help ACH Network participants better understand the impact of the Rules.
For more information about the ACH Network Risk and Enforcement or ACH Network Quality Rules, please visit https://www.nacha.org/rules/updates. For more information about NACHA’s rulemaking process, visit https://www.nacha.org/rules/rulemaking-process.
About NACHA—The Electronic Payments Association
NACHA manages the development, administration, and governance of the ACH Network, the backbone for the electronic movement of money and data. The ACH Network provides a safe, secure, and reliable network for direct account-to-account consumer, business, and government payments. Annually, it facilitates billions of Direct Deposit via ACH and Direct Payment via ACH transactions. Used by all types of financial institutions, the ACH Network is governed by the fair and equitable NACHA Operating Rules, which guide risk management and create payment certainty for all participants. As a not-for-profit association, NACHA represents more than 10,000 financial institutions via 16 Regional Payments Associations and direct membership. Through its industry councils and forums, NACHA brings together payments system stakeholders to foster dialogue and innovation to strengthen the ACH Network. To learn more, please visit http://www.nacha.org, http://www.electronicpayments.org, and http://www.payitgreen.org.