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Reduce costs, unintended consequences of ACH network changes, CUNA tells NACHA
WASHINGTON (1/14/14)--NACHA--The Electronic Payments Association must minimize costs and unintended consequences for credit unions as it takes steps to improve automated clearinghouse network risk management and enforcement, the Credit Union National Association said in a comment letter.

The NACHA plan could improve NACHA's ability to identify and enforce rules against "outlier" originators, those responsible for the highest levels of exceptions. An originator is any individual, corporation or other entity that initiates entries into the Automated Clearing House Network.

The NACHA proposal would:
  • Reduce the existing return rate threshold for unauthorized debits from 1% to 0.5%;
  • Establish a return rate threshold for account data quality returns (i.e., administrative returns) at 3% and an overall debit return rate threshold (for all return reason codes) at 15%;
  • Clarify the definition of a "reinitiated entry";
  • Apply risk management rules to third-party senders; and
  • Expand NACHA's enforcement authority.
In the letter, CUNA Assistant General Counsel Dennis Tsang noted that credit unions generally originate higher quality transactions and generally support many of the proposed changes to reduce exceptions from "outlier" Originators. However, he noted, originating financial institutions may not be able to fully control the transactions originated by the Originator and may make risk management changes that would reduce access to the ACH network for some consumers, including the underserved.

CUNA also recommended that NACHA:
  • Provide additional risk management tools and resources to assist Originating Depository Financial Institutions (ODFIs);
  • Continue to coordinate closely with, and consider the actions taken by, various federal financial regulators;
  • Conduct additional research and provide more data about enforcement actions and existing return rate thresholds before proceeding with the proposed changes; and
  • Delay compliance dates at least three months beyond the proposed dates of March 20, 2015 for the return and reinitiation changes, and Sept. 19, 2014 for third-party sender and enforcement authority changes.
For the full comment letter, use the resource link.
Other Resources

CUNA Comment Letter
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