CUNA Comment Letter

CUNA's Letter to NACHA in regards to Usage of Electronic Affidavits, Authorizations, & Records

Via e-mail

August 13, 2001

Mr. William Colbert
Network Services Associate
NACHA – The Electronic Payments Association
13665 Dulles Technology Drive
Suite 300
Herndon, Virginia 20171

Dear Mr. Colbert:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on NACHA’s proposed rule that would facilitate the use of electronic affidavits, electronic agreements and electronic storage of records in conformance with the Electronic Signatures in Global and National Commerce Act (E-Sign). As a national trade association, CUNA represents more than 90 percent of the nation’s 10,600 state and federal credit unions. This letter was developed under the auspices of CUNA’s Payment Systems Subcommittee, chaired by Terry West, President and CEO of Jax Navy Federal Credit Union, Jacksonville, Florida.

Summary of CUNA's Views

CUNA supports the proposal because it would


The proposal would facilitate the use of electronic agreements and electronic storage of records in conformance with E-Sign. This rule would allow any agreement, authorization, affidavit or other record required by the NACHA Operating Rules (Rules) to be executed in an electronic form. The term "record" includes notices, disclosures, and other forms that must be provided under the Rules. As a consequence, the proposal would also add new definitions, taken from the E-Sign Act, including terms such as "electronic," electronic record," "electronic signature" and "record".

In addition, the proposal would allow ACH participants to use electronic affidavits. The current Rules allow a consumer to receive an expedited recredit, if the consumer executes an affidavit claiming the ACH debit was unauthorized. This proposal would clarify that some type of statement, but not necessarily an affidavit, is necessary. Therefore notarization would not be necessary for those consumers in states that require an affidavit to be notarized.

CUNA supports clarifying that those electronic or written statements made under penalty of perjury will be accepted for the affidavit requirement. This clarification should help those financial institutions in states that require notarization of affidavits. In addition, allowing electronic affidavits should make the recredit process less burdensome for those consumers with unauthorized ACH debits.

In sum, CUNA supports the proposal in its current form and supports the implementation date proposed of March 15, 2002. Allowing ACH participants the option to utilize electronic communication methods to provide and execute an agreement, authorization, affidavit or other record would help consumers and financial institutions. The proposal would allow members of credit unions to conduct their financial business over the Internet instead of in- person if they so choose. Credit unions would also be able to conduct business over the web and reduce some of their costs associated with paper, such as extensive mailing, copying and storage costs.

CUNA commends NACHA for initiating positive changes to the ACH system that will benefit consumers and RDFIs. If you have any further questions, please contact CUNA's Assistant General Counsel Michelle Profit at (202) 682-4200.


Michelle Q. Profit
Assistant General Counsel