NACHA Changes

The National Automated Clearing House Association (NACHA) announced the following changes effective September 16, 2011 

Collection of return fees: This change establishes the authorization and identification requirements for ACH debits used to collect return fees for certain checks and ACH debits that have been returned for insufficient or uncollected funds. The new rule addresses when return fees can be assessed under NACHA Rules; authorization requirements; timing of assessing fees; number of fees that can be assessed and other aspects.

Recurring TEL transactions: This rule is being expanded to allow greater use of the TEL (Telephone Initiated-Entry) SEC (Standard Entry Class) code and provide additional payment options for originators and receivers. Prior to September 16, 2011 only a one-time ACH can be made with a phone authorization. This change will allow recurring payments to be collected via ACH, at a lower cost to the originator. Note: This rule change is for existing client relationships or consumer-initiated phone calls.

Enhancements to the ACH Applications

1. The scope of the TEL (Telephone Initiated-Entry) application will be expanded to permit its use for recurring consumer transactions.

2. Authorization and identification requirements for ACH debits used to collect return fees for certain checks and ACH debits that have been returned for insufficient or uncollected funds will be established.

3. The scope of the XCK Application (Destroyed Check Entry) will be expanded to permit its use for certain damaged checks that cannot be imaged or other check images that cannot be processed
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Potential Pain Points in the Rules
The scope of the annual rules compliance audit requirements were expanded to require Third-Party Senders to conduct audits to the extent that they perform any functions of an ODFI (Originating Depository Financial Institution) under the Rules.

1. Obsolete language concerning the transmission and availability of entries on days that are not banking days for both the transmitting and receiving ACH Operator and financial institution was removed.

2. Current industry practices regarding the timely return of a credit entry returned to an RDFI by its customer were codified.

3. Specific conditions under which an ODFI may dishonor a return entry and the specific conditions under which an RDFI may contest and/or correct such a dishonor were clarified.

4. Outdated language regarding warranties and liabilities of associations from the Rules was removed.

5. A provision from the rules compliance audit language related to return entries for which no corresponding rule exists was removed.

According to NACHA a rule amendment will address inconsistencies regarding the inclusion (or lack thereof) of revocation language in authorizations for single-entry transactions, and require such revocation language to be included for single entries that are scheduled in advance. Contact PTM's sister company, Cachet, for more information on how these changes affect your payroll service bureau. www.cachetbanq.com