Alert! Rules Changes Coming to the ACH Network in September

By: Virginia Wright, AAP
AVP, Relationship Manager
Sabina Barresi, AAP
AVP, Relationship Manager

Bankers are hard at work preparing for the rules changes that will become effective in September. Please pay close attention as these rules changes apply to all participants in the ACH Network!   

The first phase of Same Day ACH (SDA) has come and gone without much disruption to most financial institutions’ daily proceedings.  Phase 2 of SDA begins on September 15, 2017.  In review, Phase 1 SDA applied only to credit transactions.  Now we must embrace Phase 2 which will apply to both credit and debit transactions.

To recap Phase 1 of the same day ACH rules, any ACH credit introduced into the network as a SDA, must have the funds post to the receiver’s account by end of day processing for the bank. IAT entries as well as ENR entries were excluded from this rule. Additionally, all phases of the SDA rule states that no ACH entry over $25,000 may be sent same day ACH. 

Now let’s take a glimpse down the road to the month of September. We see Phase 2 looming ahead with a few items we must be aware of as financial institutions.  Phase 1 of SDA remains the same and will now includes a few “add ons” for this second phase.    As previously stated, Phase 2 will include debit transactions.  Starting September 15, 2017, both debit and credit transactions are available to be sent same day and the Receiving Depository Financial Institution (RDFI) must have funds availability by end of day processing.  The $25,000 limit for both debits and credits will remain in effect.  Also, the U.S. Treasury is planning to become involved in Same Day ACH.  As of now, the Treasury believes that they will be accepting Same Day tax payments as well as non-tax Same Day credits.  They are planning for the same day capabilities to include EFTPS (Electronic Federal Tax Payment Service) debits sometime in October 2017. This is subject to final publication of the 31 CFR Part 210 rule.

On the heels of Phase 2 SDA, will be the “Third Party Sender Registration” rule.  Originating Depository Financial Institutions (ODFI) must identify and register all of their third party sender customers.  To define the role of a Third Party Sender in the ACH Network, NACHA states that a Third Party Sender is “An intermediary between the company originating the ACH payment and the Originating Depository Financial Institution (ODFI) of that transaction.”

This rule requires ODFIs to review and know exactly who is originating through their institution.  If the ODFI does not have any third party senders, the ODFI is required to inform NACHA that they do not have any Third Party Senders.  NACHA will provide an easy means for a bank to supply this information to them.  NACHA’s rationale on this rule is the same as with the other rules, to maintain quality of the ACH Network.  Their ultimate goal is for all ODFIs to have a consistent method of reviewing their third party customers.   Please note that this rule comes into effect September 29, 2017.  Go to NACHA’s website to review the complete rule as well as information that all ODFIs with third party customers must provide to NACHA. 

Knowing whether a customer is playing the role of Third Party Sender or not can be somewhat difficult to figure out.  This is where the Regional Payment Associations (RPA) can be of help to an institution.  If you belong to one, please call them for guidance as they have a complete understanding of this unique role in the ACH Network.  Know that they are a great resource for discussing these new rules as well as all current NACHA Operating Rules.

For more information please contact Virginia Wright at (717) 441-4506 or Sabina Barresi at (978-482-5252)