View this email in your browser


New ACH Rules – What you need to know…
This year the ACH network has seen some enhancements to current rules as well as the introduction of new rules.  While there are some standouts to the rules this year, it appears that it will be an easy transition for both Originating Depository Financial Institutions (ODFI) as well as Receiving Depository Financial Institutions (RDFI).

Same Day Settlement Limits Increase
The most recent Same Day ACH (SDA) rule enhancement came along with an effective date of March 20, 2020.  The updated rule allows for SDA dollar limits to increase from the original limit of $25,000 to $100,000.  The result will be that almost all B2B payments can now qualify for SDA.  Nacha estimates with this new dollar threshold that B2B payment eligibility will increase to 97% of all current B2B ACH transactions.  More to come on the SDA scene in 2021 when a new processing window will become available.

Relief for Originators in E-Commerce Use Cases?
Next up with an effective date of April 1, 2020, Nacha has re-purposed infrequently used Return Reason Code R11 to now read “Customer Advises Entry Not in Accordance with the Terms of the Authorization”. The receiver and the originator in this type of entry do have a relationship, and a debit authorization is on record, but the entry contains an error.  The originator does not need a new authorization from the receiver to correct the error.  The Return Reason Code R10 was previously used as a “catch all” for these type of entries with a description of “ Customer Advises Unauthorized, Improper, Ineligible, or part of an Incomplete Transaction”   The new R10 code will be labeled “Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account”.  The new R11 code will fall under the Unauthorized Entry Return Rate Category and will be an additional Return Rate Reporting requirement of the ODFI.  The R11 code will be subjected to the “Unauthorized Entry Fee” starting April 1, 2021.   

Better Communication/Collaboration?
This year starting on July 1st, all financial institutions that are participants in the ACH network are required to register contact information with Nacha. The contact information must contain the individuals and departments within the financial institution that handle ACH operations as well as the individuals at these financial institutions that are responsible for fraud and risk.  The required information will be names, titles, emails and phone numbers.   A primary contact and a secondary contact should be listed but if a financial institution would like to have a centralized phone number and email address, it must be one that is monitored throughout the business day.  This information will need to be verified annually, and any changes must be updated within a 45-day period.  Registration will be done in the Nacha Risk Management Portal and each institution is required to register by October 30, 2021.  The goal of this new rule is to provide financial institutions a means to contacting other institutions in the ACH Network in regards to operations, risk, fraud and exception processing.  This contact information must only be used for those purposes.  The Contact Registry will be available for financial institutions, Regional Payment Associations and the ACH Operators.   As ODFIs are already required to register Direct Access and Third-Party Access Participants or register if they have neither of these, this will be new to RDFIs who in the past could voluntarily register.  Nacha is allowing a window of up to August 1, 2021 for registration before it becomes a Rules Violation against a financial institution.

Speaking of Collaboration!
Regional Payment Associations are a good resource for understanding the effects these rules may have on your financial institution.  Also, ACBB’s Compliance Anchor offers ACH webinars throughout the year.  On April 28th they offered “ACH Rules Updates” and coming in October is “ACH Government Benefit Payments”.  These are recorded and are part of the Compliance Anchor library with unlimited access for members.   As a reminder, make sure that your ACH provider as well as your ACH software is updated with each new rule.  More rules to come in 2021!

If you have any additional questions or comments, please feel free to reach out.

Virginia Wright, AAP
AVP, Relationship Manager

Forward to a Colleague Forward to a Colleague
View this email in your browser
Copyright © 2020 | Atlantic Community Bankers Bank | All rights reserved.

Our mailing address is:
1400 Market Street | Camp Hill, PA 17011
717 | 737 | 9335

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.