Post on 02-Jan-2016
© 2015, EPCOR®. All Rights Reserved.
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2015 Northern Ohio AFP Conference
ACH Rules Update
September 21, 2015Cleveland, Ohio
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This material is not intended to provide any warranties or legal advice, and is intended for education purposes only.
NACHA owns the copyright for the NACHA Operating Rules & Guidelines.
The Accredited ACH Professional (AAP) is a service mark of NACHA.
© 2015, EPCOR®. All Rights Reserved.
© 2015, EPCOR®. All Rights Reserved.
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What’s Happening in ACH?
Enforcement & Quality RulesSame-Day ACH RulesNew Rules Just ApprovedThird-Party Registration Request for
Comment
ACH Network Risk & Enforcement
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Return Rates Percentages – September 18, 2015 Unauthorized Debit Threshold – 0.5%
R05/R07/R10/R29/R51 No change to investigation or enforcement process
Admin Returns/Overall Returns Process Inquiry process – evaluate origination activity Rules Enforcement Panel will determine next steps
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Return Rate Levels:
Administrative Return Rate Level – 3% R02/R03/R04
Overall Debit Return Rate Level – 15% Excluding RCK
Rules do not require an ODFI to “track” these levels but you may want to if you feel you could
have an Originator that may exceed it
ACH Network Risk & Enforcement
ACH Network Risk & Enforcement
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Reinitiation of Entries – September 18, 2015 Clarify valid reinitiation circumstances
What is a reinitiated entry and what is not Formatting requirements
Identical Company Name/Company ID / Amount
Required Company Entry Description – RETRY PYMT
ACH Network Risk & Enforcement
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Reinitiation of Entries – September 18, 2015
Return upon customer requestR10 and WSUD
ACH Network Risk & Enforcement
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Third-Party Sender Issues – January 1, 2015 Direct Obligation to monitor, assess and enforce
limitations on their customer’s ACH origination activity
Provide proof of annual ACH audit to NACHA
NACHA’s Enforcement Authority – January 1, 2015 Bring an enforcement action based on the origination
of unauthorized entries Validated by Rules Enforcement Panel first
Improving ACH Network Quality
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Unauthorized Entry Fee – October 3, 2016 ODFI required to pay a fee to RDFI for
unauthorized returns R05/R07/R10/R29/R51 IAT is excluded
Methodology for Setting Fees Based on cost data collected from RDFIs
Amount is set and reviewed every three years
Improving ACH Network Quality
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Unauthorized Entry Fee – October 3, 2016 Collection and Disbursement of Fees
ODFIs agree to pay fee ODFIs and RDFIs authorized debits and credits to
their accounts ACH Operators will collect and distribute fees
Same Day ACH History
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2010 – FRB announces Fed SameDay ACH program Opt in / debits only / limited SEC codes Few participants
2012 – NACHA Expedited Processing & Settlement Proposal and Ballot Ubiquitous Rules based approach Ballot was defeated
2013 – FRB expands Same Day ACH Opt in / debits and credits / almost all SEC codes Slight increase in participation
2015 – NACHA Same-Day ACH Ballot Approved May 18, 2015
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Same Day ACH Benefits
Primary Use Cases Same Day Payroll
Hourly workers / Emergency Payroll / Terminated Employee B2B
Faster settlement of invoices and remittance information Expedited Bill Payment
Make on time bill payments / eliminate late payments Account to Account Transfers
Faster credit for consumers moving funds between accounts they own at other financial institutions
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Same-Day ACH – Phased Implementation
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ACH CreditsOnly
10:30 am & 3 pm ET Transmissions
1 & 5 PM ETSettlement
ACH Credits& Debits
10:30 am & 3 pm ET Transmissions
1 & 5 PM ETSettlement
ACH Credits& Debits
10:30 am & 3 pm ET Transmissions
1 & 5 PM ET Settlement
Credit Funds Availability – 5 pm RDFI Local Time
SEP 23 2016 SEP 15 2017 MAR 16 2018
No IATs or Transactions Over $25,000
Credit Funds Availability – End of RDFI Processing Day
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Same Day ACH Rules
Implementation Dates Phase 1 – September 23, 2016 Phase 2 – September 15, 2017 Phase 3 – March 16, 2018 Implementation dates are contingent on Federal Reserve
support for the Rule change Path to support by FRB through a 60-day public comment
period Comments sought on changing FRB current same day ACH
offering from optional to mandatory and the potential longer term effects on the Network
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Effective Dates Contingent on the Federal Reserve
If written confirmation
received:
Then:
by: 9/23/2015 The Rule Phases will become effective as shown in the ballot
between: 9/23/15 and 11/13/15
Each Rule Phase will become effective 6 months later than dates in ballot
Between: 11/13/15 and 5/18/16
Each Rule Phase will become effective 12 months later than dates in ballot
If written confirmation not received by May, 18, 2016, the Rule will not go into effect.
© EPCOR 2015. All Rights Reserved.
Same Day ACH Rules
Identifying Same Day ACH Payments Effective Entry Date Field in Batch Header Record
Today’s date in Effective Entry Date Field, deposited at one of the two deposit windows
Optional standard for ODFIs desiring an additional indicator to be used by Originators to signify intent
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Example:
ODFI receives an Originator ACH file with a current day Effective Entry Date. The ODFI
could validate the Originator’s intent for same-day settlement by verifying the content of the
Company Descriptive Date field.
SDHHMMSame-day/Hours/Minutes
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Same Day ACH Rules
Identifying Same Day ACH Payments Operators will settle entries with invalid or stale-date
in the Effective Entry Date field at the first opportunity, which may be as early as the same-day These entries would be subject to the Interbank Fee
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Same Day ACH Rules
Returns May be initiated and sent the same day – but not required Debit returns still have a 2 banking day return window Non same day returns will settle at next available settlement
opportunity, which could be same day Not subject to the eligibility limits as on the forward side Interbank fee does not apply
Non-Monetary Transactions NOC / Prenote / Remittance Only
Eligible in Phase 1 Interbank fee does not apply
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Same Day ACH Rules
Balanced Approach for ODFIs/RDFIs ODFI – opportunity for development of same day
products and services RDFI – Interbank Fee
Paid by ODFIs to RDFIs Recover costs to implement and support Same Day ACH
over a reasonable time period Estimated at 5.2 Cents
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What Do You Need to Do?
Determine Your Appetite for Same Day ACH Study the use case scenarios Weigh benefits and costs Talk to your financial institution to determine if Same
Day ACH will be an optionUnderstand the Impact of Receipt of Same
Day ACH Transactions Credits in 2016 Debits in 2015 Cash Management Later in the Day
Settlement at 1 & 5 pm ET by phase 1
© 2015 EPCOR. All rights reserved.
ACH Rules Ballots Approved 9/4/2015
September 18, 2015 Implementation RDFI Obligation to Recredit Receiver - Improperly Reinitiated
EntriesJanuary 1, 2016 Implementation
Recrediting of Receiver - Removal of the 15 calendar day timeframe
Clarify ODFI Statement Requirements for CIE & WEB Credits Clarify Commercially Reasonable Encryption Standards Add Definition of Zero-Dollar Entry Expand Permissible Criteria for ODFI Requests for Return Clarify RDFI Warranties for NOC
March 18, 2016 Implementation Disclosure Requirements for POS Entries
© 2015 EPCOR. All rights reserved.
Request for Comment – Third-Party Registration
Proposed Changes to Rules Require ODFIs to Register Third-Party Senders
with NACHA Required Information to be Provided
• ODFI name and contact information• Name and principal business location of TPS• RTN and Company ID used for TPS transaction originated
30 day grace period for changed info or adding new TPS
Registration Charge to Cover Costs of Registry
Comments Due October 9, 2015
MARCY CAUTHON, AAP, NCPDIRECTOR, PAYMENTS EDUCATION
MARCYC@EPCOR.ORG
Questions?