Nacha proposals could add costs, burdens to credit unions
As Nacha works to improve the efficiency of the ACH Network’s return processes, America’s Credit Unions provided feedback on three proposals related to return efficiencies and operations.
Dishonored return timeframes
Under consideration for dishonored return timeframes is shortening current timeframes for sending, contesting, or correcting dishonored returns. America’s Credit Unions argued that Nacha should not proceed with a rule change that may inadvertently shift liability onto receiving depository financial institutions (RDFIs) with limited administrative bandwidth to respond quickly to dishonored return entries.
America’s Credit Unions requested additional information to better understand what is driving the volume in dishonored returns and whether the fact-specific nature of fraud related returns could make it difficult to expedite certain RDFI processes.
Return timeframes
Nacha is also proposing to shorten the return timeframe for certain returns, based on specific return reason codes that can be decisioned by a processing system without the need for manual review.
America’s Credit Unions offered support for efforts to improve ACH return efficiency, but recommended additional information be collected on the benefits for smaller RDFIs before adopting mandatory accelerated return timeframes. As the proposal would require credit unions with predominantly manual ACH processes to evaluate their ability to rely on automated decisioning, it could raise testing and monitoring costs for these institutions.
“Banking Day” definition and related ACH operational issues
Currently, Nacha, The Clearing House, and the Federal Reserve Banks use different definitions for the term “Banking Day” and Nacha is seeking insight into the meaning and significance of the term in its Operating Rules.
America’s Credit Unions cautioned against adopting a definition or rule change that originating depository financial institutions (ODFIs) or RDFIs are not equipped to implement. Changing the definition could create weekend or holiday work; small credit unions may lack the staff or resources to accomplish.
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