Compliance Blog

Written by Brandy Bruyere, Regulatory Compliance Counsel

On May 19, NACHA announced the approval of Same Day ACH which would amend NACHA rules allow some Entries to be processed the same day, promoting faster payments. According to NACHA, the new provisions would “build upon existing, next-day ACH Network capabilities and establish a new option for same-day clearing and settlement via ACH.”

Currently, most ACH transactions are settled on the next business day after origination. The new rules, which will be implemented in phases, would ultimately allow Same Day ACH for most transactions. While Same Day ACH will be optional for Originating Depository Financial Institutions (ODFIs), receipt of such transactions will be mandatory for Receiving Depository Financial Institutions (RDFIs). The changes also add new Part 11.1 Determination of Same Day Entry Fee, requiring ODFIs processing Same Day ACH transactions to pay the RDFI a Same Day Entry Fee of 5.2 cents per transaction.  Also, Same Day ACH would not be available for any International ACH Transaction (IAT) Entry or large transactions exceeding $25,000. The rule also amends sections relating to the determination and revision of Same Day Entry Fees.

This blog is a very high-level summary of some of the key components regarding the phased implementation of the changes. For more detailed information including full text of the new rules and Frequently Asked Questions, check out this NACHA webpage.

Phase 1—Credit Entries and Non-monetary Entries—Effective September 23, 2016

In part, the first phase of rule changes would add a new Section 8.84 Same Day Entry which permits same day processing for most credit Entries transmitted by an ODFI to its ACH Operator. Phase 1 explicitly excludes debit Entries from Same Day ACH. During Phase 1, for Same Day credit Entries, Subsection 3.3.1.1 General Rule for Availability of Credits will require RDFIs to make funds available in the account “no later than the RDFI’s processing for that for that settlement date.” However, during Phase 1, the RDFI is not required to make funds available for withdrawal on the Settlement Date. The rule also amends sections such as Subpart 3.2.2 Glossary of Data Elements and Subpart 10.4.6.2 Responsibilities of Enforcement Panel.

Phase 2—Addition of Debit Entries for Same Day ACH—Effective September 15, 2017

In Phase 2, Section 8.84 Same Day Entry would change so that debit Entries will also be eligible for Same Day ACH. Phase 2 also includes various amendments relating to Reversing Entries, Reclamation Entries, and Data Elements. For example, Subsection 2.8.3 Time Limitations on Initiation of Reversing Files will include a new technical requirement relating to debit Reversing Entries. Debit Reversing Entries must not contain an Effective Entry Date that is earlier than the Effective Entry Date of the related credit Entry.

Phase 3—RDFIs Must Make Funds Available by 5:00 PM Local Time—Effective March 16, 2018

Subsection 3.3.1.1 General Rule for Availability of Credits would be amended to require RDFIs to make credit Same Day Entries available no later than 5:00 PM local time, subject to the RDFI’s right to return an Entry. However, the RDFI will generally be exempt from this requirement if it “reasonably suspects that a credit Entry is unauthorized.”

NACHA issued scenarios that provide illustrations of how the current rules function and how the different phases of implementation will function. This document may be helpful in understanding the rules and how they may impact your credit union. NACHA’s Executive Summary may also be useful as a basic starting point. NAFCU’s Regulatory Affairs team will soon release a Final Regulation which goes into further detail on NACHA’s Same Day ACH rules for our members.

In a related note, on May 21 and in response to the NACHA announcement, the Federal Reserve issued a request for comment for adopting same-day ACH service for the Reserve Banks’ ACH service. Comments are due by July 2, 2015. NAFCU members can send comments regarding the Fed proposal to NAFCU Regulatory Affairs Counsel Kavitha Subramanian, ksubramanian@nafcu.org.

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CFPB Issues Spring Rulemaking Agenda. On May 22, the CFPB published its Spring 2015 rulemaking agenda. For more information, here is the bureau’s blog and the agenda.

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Palate Cleanser. NACHA is a lot for a Friday, so here are a couple of photos that might take the edge off. Nolan is not crawling, but he will roll to where he wants to go—which sometimes includes heading in Lemmy’s direction. Also, now that summer is here, we are glad that Nolan enjoys hats so much that he’ll even pull them down further over his face. At least it keeps the sun off?