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CUNA Regulatory Comment Call

June 9, 2003

EXECUTIVE SUMMARY

NACHA-The Electronic Payments Association has issued a request for comments on a proposal that would change minor, technical rules. Comments on the proposal are due to NACHA by June 27, 2003 and to CUNA by June 19. The request for comment proposes to modify the NACHA Operating Rules in the following ways:

• The proposal would modify the title and description of Return Reason Code R12 from "Branch Sold to Another DFI" to "Account Sold to Another DFI" to clarify that this Return Reason Code is used to address the sale of a specific account as a branch.
• The proposal would clarify the description of what constitutes excused delay under the NACHA Operating Rules, so that ACH participants would understand that this definition applies to catastrophic events and not normal processing problems. ACH participants are responsible for having back up procedures and contingency planning for normal processing problems. Specifically, the amendment would state that, "Delay caused by the general failure of a Participating DFI's computer facilities or other equipment does not constitute an excused delay and should be addressed within the Participating DFI's contingency planning policies." Excused delays allow participating financial institutions to be excused from complying with normal ACH deadlines.
• The proposal would require receiving depository financial institutions (RDFIs) to include in their annual audits checks on whether they are including the Check Serial Number Field on Destroyed Check Entries (XCK) items. RDFIs are currently required to provide the contents of the Check Serial Number Field for any XCK entry on the consumer's periodic statement. Under the amendment, they must verify, within their audits, that they do so.
• The proposal would require the expansion of the size of the Total Credit Entry Dollar Amount Field and Total Debit Entry Dollar Amount Field in the Automated Accounting Device (ADV) Company/Batch Control Record, and creation of a unique File Control Record for ADV entries. The ADV Standard Entry Class Code is used by ACH Operators to identify accounting information for Participating DFIs in machine readable format. Occasionally, the ACH Operators originate ADV files that contain dollar amounts larger than these fields currently will accommodate. This amendment would make those fields wide enough so that ACH Operators could include the entire amount.
• The implementation date for the first three changes would be March 12, 2004 and for the last change it would be September 10, 2004.

Please send your comments to CUNA by June 19, 2003. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com and Assistant General Counsel Michelle Profit at mprofit@cuna.com; or mail them to Mary and Michelle c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004.

In addition, CUNA recommends that all credit unions respond directly to NACHA because NACHA tabulates results to its surveys. If you would like to respond directly to NACHA and copy CUNA you may do so by using the NACHA survey form at http://www.nacha.org/ACH_Rules/Rule_Making__Process/Rules_Work_Groups/RFC-52/rfc_52.htm. Comments sent directly to NACHA should be sent to Maribel Bondoc, Network Services Assistant, NACHA, 13665 Dulles Technology Drive, Suite 300, Herndon, VA 20171, fax: (703) 787-0996 or email: mbondoc@nacha.org, no later than Friday, June 27, 2003. Please provide CUNA a copy by sending your comments to Mary Dunn at mdunn@cuna.com Michelle Profit at mprofit@cuna.com.

1. Does your credit union support the modification of the return code R12 from "Branch Sold to Another DFI" to "Account Sold to Another DFI"?
   
   

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2. Does your credit union support the clarification of the description of excused delay, so that it is clear that delays are excused only for catastrophes and not for normal processing problems?
   
   

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3. Does your credit unions support the requirement that RDFIs audit themselves to ensure that they include the check serial number for Destroyed Check Entries (XCK) on these items and member statements?
   
   

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4. Do you support the ACH Operator request to expand certain credit and debit fields for the Automated Account Advise standards entry class code?
   
   

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   Please submit your name, address, and phone number.
   
   

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