CUNA Comment Letter

Operational Efficiency of the ACH Network

June 27, 2003

Ms. Maribel Bondoc
Network Services Assistant
NACHA – The Electronic Payments Association
13665 Dulles Technology Drive
Suite 300
Herndon, Virginia 20171

Dear Ms. Bondoc:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the proposal by NACHA to enhance the operational efficiency of the automated clearing house (ACH) network. CUNA, a national trade association, represents more than 90 percent of the nation’s 10,000 state and federal credit unions. This letter reflects the views of CUNA’s Payment Systems Subcommittee, whose chair is Terry West of VyStar Credit Union, Jacksonville, Florida. CUNA supports the proposed changes for operational efficiency; however, we recommend that the implementation date for this rule be changed to September 10, 2004.

CUNA supports the modification of the return reason code. 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. However, CUNA believes that the return reason code does not provide enough information to the originating depository financial institution (ODFI). Instead of returning an entry with an R12 reason code, CUNA believes receiving depository financial institutions should generate a Notification of Change (NOC) with a correct account, routing and transmit number, so that other ACH participants would know where to send the entry. The implementation date for this rule change should be September 10, 2004, to give all ACH participants sufficient time to make necessary program changes.

CUNA supports the clarification of the description of excused delay. 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.

CUNA supports the requirement that RDFIs audit themselves to ensure that they include the check serial number for Destroyed Check Entries on these items and member statements. This requirement is consistent with recent rule changes. RDFIs are currently required to provide the contents of the Check Serial Number Field for any XCK entry on the consumer's periodic statement.

Finally, CUNA supports the ACH Operator request to expand certain credit and debit fields for the Automated Account Advise standards entry class code. 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.

CUNA supports the proposal to promote operational efficiency. 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