Compliance Blog

Over the past several months, Nacha has been busy helping credit unions navigate the pandemic but they have also been busy pushing forward with the modernization of the ACH network. Today’s post highlights some recent actions Nacha has taken.

COVID-19 Guidance

At the start of the pandemic, Nacha issued a series of bulletins alerting credit unions to changes it was making to accommodate the virtual environment that was becoming commonplace across the world. The bulletins offered relief related to records, electronic Written Statements of Unauthorized Debit (WSUD) and returns for interrupted services. Nacha also delayed the effective date of the new Supplementing Data Security Requirements rule. More on these bulletins can be found in this NAFCU Compliance Blog post.

Last month, Nacha issued an update on this relief. In ACH Operations Bulletin #7-2020, Nacha extended the relief indefinitely and noted it will provide 30-day advance notice prior to expiration. Here is a summary from the bulletin of the covered relief:

1. "Relief from deadlines for delivery of certain records that are required under the Nacha Rules; and relief from Rules enforcement response deadlines: Nacha will not enforce cases in which a Proof of Authorization, Source Document/Item, or Written Statement of Unauthorized Debit is provided after the existing 10 Banking Day time frame but is provided within 20 Banking Days.
2. Relief from the signature/similar authentication requirement for Written Statements of Unauthorized Debits: Nacha will not enforce the signature or similar authentication requirement when [Receiving Depository Financial Institutions (RDFIs)] obtain a consumer’s WSUD.
3. Relief from Return Rate Levels: With respect to potential Rules violations for elevated return rates and levels, Nacha will provide relief for potential Rules violations on a case-by-case basis.
4. Relief from signature requirement for POP Entries: Nacha will not enforce the signature requirement for the authorization of POP Entries.
5. Relief from signature or similar authentication requirement for POS Entries: Nacha will not enforce the signed or similarly authenticated requirement for the authorization of POS Entries when Originators elect not to ask customers to enter a PIN.”

New Rules

Nacha also announced last month the approval of the eight amendments which are part of its Meaningful Modernization rules. Here is a summary of some of these amendments:

1. Standing Authorization: A new entry type has been created, Subsequent Entry, that allows for authorization of future debits that do not fall within the definition of a Recurring Entry.
2. Oral Authorization: Consumer debits other than TEL transactions can be authorized orally.
3. Alternative to Proof of Authorization: When an RDFI requests proof of authorization, an Originating Depository Financial Institution (ODFI) may choose to accept a return in lieu of proving the proof of authorization.
4. Written Statement of Unauthorized Debit via Electronic or Oral Methods: RDFIs are explicitly permitted to accept a WSUD electronically or orally.

Other related clarifying amendments and technical corrections were also approved. These rules become effective September 17, 2021.