HERNDON, Va. -- Yesterday, despite strong opposition from NACS and other stakeholders, the Federal Reserve Board (FRB) approved changes to the Federal Reserve Banks' same-day automated clearing house (ACH) service that mirror recent amendments to NACHA's ACH operating rules. NACHA is the electronic payments association that administers and establishes rules for the ACH network.
NACHA’s same-day ACH rule will be incorporated into Operating Circular 4, which governs the Reserve Banks’ ACH services. The new rule, effective September 23, 2016, requires receiving depository financial institutions (RDFIs) to participate in the service and originating depository financial institutions (ODFIs) to pay a fee to RDFIs for each same-day ACH forward transaction.
Shortly after NACHA announced its rule change, the FRB requested comments on potential enhancements to the Federal Reserve Banks’ same-day ACH service to bring it more in line with NACH A’s amended ACH operating rules. NACS filed comments with both NACHA and the FRB opposing this same-day ACH rule, expressing concern that the fees for same-day ACH transactions will be high and that the rule sets a bad precedent for the electronic payments industry.
NACHA feels otherwise. “With the Federal Reserve’s support of the NACHA rule, the industry’s commitment to modernizing the payments system and enabling a ubiquitous faster payment option can be fully realized,” said NACHA’s President and CEO Janet O. Estep in a statement. “Same Day ACH is a game changer as it will enable new options for consumers, businesses and government entities that want to move money faster, and will serve as a building block for enabling payments innovation in the development of new products and services.”
On May 19, NACHA amended its operating rules to enable ubiquitous same-day capability for virtually all ACH transactions. Its same-day ACH rule allows ODFIs to send same-day ACH transactions to accounts held at any RDFI. According to NACHA, the new rule builds upon existing, next-day ACH network capabilities by establishing two new same-day settlement windows. The rule also requires that all RDFIs receive same-day transactions and provide faster funds availability to customers, and establishes a same-day entry fee paid by ODFIs through which RDFIs will recover some of their costs associated with mandatory receipt of same-day ACH transactions.
The rule will be implemented in three phases:
- In Phase 1, effective on September 23, 2016, ACH credit transactions will be eligible for same-day processing.
- Same-day ACH debits will be added in Phase 2.
- Phase 3 will include faster ACH credit funds availability requirements for RDFIs; specifically, funds from same-day ACH credit transactions will need to be available to customers by 5 p.m. RDFI local time.