CUNA Regulatory Comment Call
June 5, 2002
(NOT A MAJOR RULE)
ACH Proposal Eliminates Fee for Requesting A Copy of an Authorization and Requires Check Number on Destroyed Check Entries
NACHA-The Electronic Payments Association (NACHA) has issued a request for comments to improve operational efficiencies within the ACH network. Comments on the proposal are due by June 25, 2002. The NACHA proposal would:
- Prohibit an originating depository financial institution (ODFI) from requesting fees for providing a receiving depository financial institution (RDFI) with a copy of an authorization;
- Establish a 10-day deadline for an ODFI to provide an RDFI with a copy of an authorization when such a copy is requested by the RDFI in writing;
- Clarify the right for an RDFI to request a copy of an authorization from an ODFI, both before and after receiving an ACH entry;
- Clarify the definition of POP and RCK entries to define them as single-entry transactions;
- Revise the definition of Return Reason Code R29, Corporate Customer Advises Not Authorized, to clarify that this is for the return on one specific debit entry;
- Modify the check serial number field in destroyed check entries to make the field a mandatory, rather than optional field;
- Modify the ACH Operators Automatic Batch Rejection edit criteria regarding valid transaction codes to incorporate loan and general ledger transaction codes;
- Rename the Item Research Number Field in TRC and XCK entries; and
- Eliminate the RET Standard Entry Class Code.
Please send your comments to CUNA by June 17, 2002. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn or Assistant General Counsel Michelle Profit at email@example.com; or mail them to Mary or Michelle c/o CUNAs Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004.
NACHA asks that credit unions complete a survey to provide comments on this rule change. If you would like to respond directly to NACHA and copy CUNA you may do so by using their survey form at www.nacha.org. Comments sent directly to NACHA should be sent to William Colbert, Network Services Manager, NACHA, 13665 Dulles Technology Drive, Suite 300, Herndon, VA 20171, fax: (703) 787-0996 or email: firstname.lastname@example.org, no later than Tuesday, June 25, 2002. Please provide CUNA a copy by sending your comments to Michelle Profit at email@example.com.
BACKGROUND ON THE PROPOSAL
The proposal would establish procedures for requesting a copy of an authorization, all of which would become effective on March 14, 2003. Currently, the NACHA Operating Rules (Rules) do not discuss whether an ODFI can charge an RDFI a fee when the ODFI provides a copy of an authorization to the RDFI. The amendment would make it explicit that no fee can be charged for this service. Similarly, the Rules are silent regarding the deadline for an ODFI to provide a copy of an authorization to the RDFI, when the RDFI makes a request for one in writing. The proposal would clarify that the ODFI should provide a copy of an authorization within 10 banking days of receiving a written request for the copy from the RDFI. The Rules make explicit that a RDFI may request, in writing, that an ODFI provide an authorization before it receives the entry. The proposal clarifies that RDFIs also can request an authorization after receiving an automated clearing house (ACH) transaction as well.
For destroyed check entries (XCK) the check serial number field is currently optional and it is not required to be included on the consumers periodic statement. The proposal would make completion of the field mandatory for originators and would require that the information in this field be included by the RDFI on a consumers periodic statement. NACHA proposes to make this change effective on September 12, 2003.
The Rules also proposes changes that would make the ACH network rules more consistent for different types of ACH transactions. The rules would clarify that re-presented check entries and point-of-purchase ACH entries are for single ACH debits. This clarification already applies to other new ACH applications. The current description of Return Reason Code Corporate Customer Advises Not Authorized would be clarified to explain that this code is for one specific debit entry. According to NACHA, this change is warranted because some ACH users have used the code to revoke a corporations authorization for all future ACH debit entries. These clarifications would become effective on March 14, 2003.
The proposal also recommends several technical changes. NACHA proposes that the description of the ACH Operator edit concerning transaction codes be updated to reflect all applicable transaction codes. Also, NACHA recommends that the field, which is intended to contain the MICR locator number for the item be renamed for clarity. The field name would be changed to the "ODFI MICR Trace Number." Finally, a review of the RET standard entry class code by NACHA, shows that it is used extremely rarely, and is no longer necessary. Therefore, NACHA recommends its elimination. The proposed effective date for all these changes would be September 12, 2003.
QUESTIONS REGARDING THE PROPOSAL
- Do you support an explicit provision that eliminates the ability of ODFIs to charge a fee for providing a copy of an authorization? Why or why not?
- Do you support the 10-day deadline for an ODFI to provide a copy of an authorization that is requested by the RDFI in writing? If not, do you think the deadline should be longer or shorter?
- Do you believe that inclusion of the check serial number field on destroyed check entries should be mandatory? Please explain.
- Do you believe that RDFIs should be required to include this check serial number for destroyed check entries on the periodic statement? This requirement applies to other ACH applications. Please explain. Do you support the implementation date of September 12, 2003 for this change? Please explain.
- Do you support elimination of the RET Standard Entry Class Code? According to NACHA, this is rarely used and is no longer necessary. Please explain.
- Do you have comments on other provisions within this proposal? Please explain.
Eric Richard General Counsel (202) 508-6742 firstname.lastname@example.org |
Mary Mitchell Dunn SVP & Associate General Counsel (202) 508-6736 email@example.com
Jeffrey Bloch Assistant General Counsel (202) 508-6732 firstname.lastname@example.org
Catherine Orr Senior Regulatory Counsel (202) 508-6743 email@example.com