CUNA Comment Letter
June 25, 2002
Mr. William Colbert
Network Services Manager
NACHA The Electronic Payments Association
13665 Dulles Technology Drive
Herndon, Virginia 20171
Dear Mr. Colbert:
The Credit Union National Association (CUNA) appreciates the opportunity to comment on various proposed changes to the NACHA Operating Rules developed by NACHA in its effort to improve operational efficiency within the automated clearing house (ACH) network. CUNA, a national trade association, represents more than 90 percent of the nations 10,300 state and federal credit unions
Summary of CUNA's Views
CUNA has the following comments on the changes proposed by NACHA:
- CUNA supports an explicit amendment to the rules that would prohibit originating depository financial institutions (ODFIs) from charging a fee for providing a copy of a consumers authorization to an receiving depository financial institutions (RDFI) that requests the authorization.
- CUNA supports amendments to the rules that give ODFIs a 10-day deadline within which they must provide a copy of such an authorization.
- CUNA believes that including a check serial number on an ACH item that has been created from a destroyed share draft a XCK entry-- should be mandatory and that this information should be included on a consumers periodic statement.
- CUNA supports the elimination of the RET Standard Entry Class Code.
- Finally, CUNA supports technical provisions within the proposal that would clarify that certain ACH entries and Return Reason Code R29 are for one-time specific debit entries and not multiple ACH entries.
CUNA supports prohibiting ODFIs from charging a fee for providing a copy of an authorization because such fees hurt consumers and delay the resolution of consumer disputes. A RDFI would only request a copy of a consumers authorization of the ACH debit if the consumer claimed it was unauthorized. A consumer that may have been the victim of an unauthorized debit should not be charged for requesting the evidence that is necessary to prove that claim. Moreover, prohibiting fees should streamline the process since remittance and collection of fees delay processing. The elimination of fees should help consumers to resolve their disputes in a timely fashion without incurring charges.
CUNA supports mandating that ODFIs retrieve a copy of a consumers authorization within 10 days of a written request from a RDFI and clarifying the right of a RDFI to request a copy of an authorization from an ODFI both before and after receipt of an ACH item. This deadline streamlines resolution of consumers disputes and allows RDFI to meet their return deadlines. RDFIs must return unauthorized transactions within sixty days and members may only become aware of these transactions after they receive their monthly account statements. After a consumer files a complaint, there is not much time for an RDFI to return an ACH item within the return deadline. As a result, putting a 10-day limit on the retrieval of a consumer authorization should help consumers and RDFIs meet the deadline for unauthorized returns.
CUNA supports requiring an ODFI to include the check serial number on a destroyed check entry and requiring a RDFI to print that information on its members statement. These requirements would help account holders to recognize these transactions and will result in fewer consumer inquiries to RDFIs. These amendments could require some ACH participants to change their software programs. Therefore NACHAs proposal to provide an extended implementation date of September 13, 2003 is appropriate.
CUNA supports the elimination of the RET Standard Entry Class Code. According to credit unions which responded to CUNA, at least one regional ACH association, and NACHA these codes are seldom used. CUNA encourages the deletion of all seldom-used codes.
Finally, CUNA supports technical provisions within the proposal that would clarify that certain ACH entries and Return Reason Code R29 are for one-time specific debit entries and not multiple ACH entries. CUNA disagrees, however, with the recommended implementation date of March 14, 2003 for these amendments. These amendments would not require participants to change their ACH software programs. In most cases, these amendments would simply clarify the existing rules. Therefore, CUNA recommends that these proposed amendments be implemented on December 13, 2002, rather than later.
CUNA commends NACHA for examining ways to improve the operational efficiency in the ACH system through changes in its rules. If you have any further questions, please contact CUNA's Senior Vice President and Associate General Counsel Mary Dunn or me at (202) 638-5777.
Michelle Q. Profit
Assistant General Counsel