WASHINGTON (6/20/08)—Credit unions that originate or receive automated clearinghouse (ACH) transactions should start now to prepare for compliance with new rules that go into effect March 20 of next year, according to the Credit Union National Association (CUNA). CUNA Director of Compliance Information Valerie Moss, in the June issue of CUNA’s Credit Union Magazine
, notes that NACHA—the electronic payments association in Herndon, Va.—recently amended its operating rules to facilitate compliance with the Office of Foreign Assets Control (OFAC) regulations. OFAC requires credit unions and others to block property and reject transactions involving any country, entity, or individual on OFAC’s Specially Designated Nationals and Blocked Persons list. The new rule affects international automated clearinghouse transactions (IAT), but not domestic OFAC compliance obligations. Moss said the changes are designed to improve institutions’ ability to identify all international payments flowing through the ACH network and all parties involved. In her article entitled, “NACHA Aligns Rules with OFAC Obligations,” Moss informs credit unions that NACHA recommends the following steps for credit unions preparing for the 2009 rules:
* Become familiar with new ACH rules related to IAT; * Revise ACH OFAC compliance policy for both originating and receiving IAT transactions; * Review existing agreements with corporate originators and vendors to ensure IAT compliance; * Review all originators for possible IAT scenarios, and determine if any of them make the credit union a gateway operator; * Educate appropriate staff (such as operations, compliance, audit, and member service) on IAT requirements; * Review additional processing costs for IAT transactions; * Review the credit union’s account analysis statement to ensure it can include new services; * Review downstream applications (such as reporting systems, statements, and online banking platforms) for the ability to accept new format and processing requirements; * Check vendor readiness; * Update and provide training on all applicable procedures; and * Test with vendors, operators, correspondent banks, and so forth.
CUNA members can use the link below to read more on this compliance topic.