WASHINGTON (12/12/11)--The Credit Union National Association (CUNA) has encouraged the Electronic Payments Association (NACHA) to conduct a pilot program to study the effects of its proposed network-wide premium same-day automated clearing house (ACH) expedited processing and settlement (EPS) service before taking further action.
CUNA in a comment letter added that credit unions and others should be given the option of opting in to the new EPS service, and said that not all receiving financial institutions should be required to receive and post same-day ACH payments because of significant implementation and risk management concerns, especially for smaller credit unions and other financial institutions.
NACHA has proposed amending its operating rules to enable EPS ACH entries to be processed and settled on the same day they are originated, while preserving existing ACH processing and settlement features for non-EPS entries. Under the proposal, credit unions and all other Receiving Depository Financial Institutions (RDFIs) would be required to both receive and settle EPS transactions.
The proposal sets specific timelines for payment file transmissions and fund availability, and also proposes new per-entry EPS dollar limits of $25,000 or $100,000.
NACHA has said the proposal would aid financial institutions by easing the flow of funds, increasing customer use of direct deposit, reducing counter-party settlement risks on received ACH credits, and mitigating risks.
CUNA in the comment letter said credit unions would incur increased costs, including implementation costs, under the NACHA proposal.
The EPS proposal would provide network-wide expedited settlement for all types of payments that currently use the ACH network, and provide a platform for other applications, such as mobile and person-to-person (P2P) payments. Credit unions and other financial institutions could offer EPS as a premium service to their customers.
If the current proposal is finalized, NACHA should "provide an adequate timeframe for implementation to minimize costs and impact to credit unions and others" that are working to comply with various regulatory changes, CUNA said.
For the full comment letter, use the resource link.