NCUA Releases Letter to CUs Regarding Same-Day ACH Payments

The National Credit Union Administration (NCUA) has released a Letter to Credit Unions regarding same-day ACH payments: 16-CU-06.

Under NACHA’s Same Day ACH rule, originating depository financial institutions (ODFIs) have the option to send same-day ACH transactions to accounts at any receiving depository financial institution (RDFI), making participation in the rule for the receipt of same-day ACH payments mandatory for all RDFIs.

Originating ODFIs must pay an interbank fee of 5.2 cents per transaction to the RDFI for each same-day ACH forward transaction. This fee will allow RDFIs to recover some of the costs associated with enabling and supporting mandatory receipt of same-day ACH transactions. ACH Operators will collect the fee on behalf of the RDFIs. The fee will settle between the ODFI and RDFI on a monthly basis.

While there is no limit on the aggregate value of a batch of Same Day ACH transactions, the following transactions are ineligible for Same Day ACH processing:

  • International ACH transactions (IATs)
  • Single, large dollar transactions greater than $25,000

Beginning with the first phase, ODFIs will be able to submit files of same-day ACH payments through two new clearing windows provided by the ACH Operators:

  • A morning submission (10:30 a.m. EST deadline; 1:00 p.m. EST settlement)
  • An afternoon submission (2:45 p.m. EST deadline; 5:00 p.m. EST settlement)

Credit unions should be aware that moving funds from account to account more quickly will require more timely and efficient cash forecasting in order to meet liquidity needs. Effective implementation of same-day ACH will require credit unions to manage intraday liquidity more closely.

Same-day ACH processing also has the potential to increase fraud risk due to the accelerated timeframe for transactions, giving ODFIs less time to perform back-end risk management functions.  To help mitigate the potential for increased fraud risk, ODFIs should:

  • Emphasize strong authentication and security controls around file delivery and online banking transfers
  • Consider optional ‘tolerance’ limits at file, batch, and entry levels for same-day ACH Originators

Steps to Prepare for Same Day ACH

All depository financial institutions should take the following steps, at a minimum, to prepare for NACHA’s implementation of the Same Day ACH rule:

  • Discuss schedules and deadlines with your ACH Operator;
  • Discuss ACH application and process changes with third-party service providers and senders, including corporate credit unions (where applicable);
  • Prepare a same-day ACH operational impact analysis;
  • Assess and plan for staffing needs to meet additional operational impact;
  • Develop procedures and timelines for internal processes;
  • Test your ability to provide funds availability and meet the credit union’s liquidity needs (visibility of future settlement position);
  • Develop an implementation and testing plan;
  • Review and revise your business continuity plan;
  • Inform and educate members.

NACHA requests service providers contact subject matter expert Amy Morris to report on implementation efforts and readiness; you can reach her at amorris@nacha.org, or at 703-561-1100.

Compliance Question of the Week

 

How do check holds work when using Remote Deposit Capture? Does Regulation CC apply?

Currently, Regulation CC does not address deposits made via the remote deposit channel. Funds availability guidelines for deposits made through remote deposit capture should be address in the contract that exists between your credit union and your member.

Credit unions should consider conducting a risk assessment for their remote deposit capture product which could aid in the identification of a well written funds availability policy. The FFIEC has published a paper on risk management for remote deposit capture that could aid in the creation of a risk assessment specific to your institution.

Resources

FFIEC Risk Management of RDC
12 CFR 229

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National Automated Clearing House Association (NACHA)

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Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance News, Federal, NCUA.