CUNA Regulatory Comment Call


July 14, 2006

NACHA Proposal to Add Telephone Number on ACH Record

EXECUTIVE SUMMARY

Please feel free to fax your responses to CUNA at 202-638-7052; Assistant General Counsel Lilly Thomas at lthomas@cuna.com; or mail them to Lilly c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004. Click here for a copy of this Request for Comment.

BACKGROUND

In 2005 the Electronic Check Council looked into the concept of providing a telephone number with an ACH record and conducted a survey to determine industry interest. The survey showed an overwhelming amount of support for the inclusion of a telephone number.

The purpose of providing a telephone number would be to facilitate a more efficient method or an elimination of handling customer service inquiries by providing Receivers a method to contact the Originator directly about a particular transaction. Questions regarding the transaction would be directed to the individual or department of the Originator with knowledge of the ACH transaction.

DISCUSSION OF PROPOSAL

NACHA is proposing to include the telephone number with other Originator data, which is located within the Company/Batch Header Record for forward, return, and notification of change entries. The Company/Batch Header provides key information necessary for the identification of each ACH transaction and includes the Originator’s name and identification number, and descriptive information relating to the nature of the payment.

There are two fields within the Company/Batch Header that are not required for the processing or identification of the entry. The first is the Company Discretionary Data Field, which is an optional field comprised of 20 characters and available for the sole use of the Originator. The second field is the Company Descriptive Date, which has six characters and is used by the Originator for descriptive purposes.

Ten characters are needed to support the telephone number, which would eliminate the option of using the Company Descriptive Date Field. NACHA is proposing to reduce the 20-character Company Discretionary Data Field to ten positions and define the remaining ten positions as a "mandatory Customer Service Telephone Number Field." When a field is defined as "mandatory", ACH Operators must edit and reject entries in which the Field contains all spaces or zeros.

This proposal would establish an ODFI warranty and obligation that the Originator maintains a working telephone number that is answered during the Originator’s normal business hours for Receiver questions about the transaction. The NACHA Operating Guidelines would include language clarifying that the person answering calls to this telephone number would need to be able to support and respond to questions about specific entries to a Receiver’s account.

Phase two of the proposal would require RDFIs to print the contents of the Customer Service Telephone Number Field on Receivers’ financial institution periodic statements. Minimum Description Standards would be modified to require RDFIs to send or make available the contents of the Customer Service Phone Number Field to both consumer and business Receivers on their periodic statement.

Additionally, the ACH audit requirements would be modified to include an ODFI obligation to verify that the originator maintains a working telephone number that is answered during the Originator’s normal business hours. The audit requirements would also be amended for Phase Two to include a RDFI send or make available the customer service telephone number to receivers on their periodic statements.

If approved, Network participants would incur the costs of software changes to accommodate the formatting change. Originators would incur additional costs to maintain a customer service telephone number for transaction inquiries if they do not currently support this function. RDFIs would also incur a cost to include a new field on their member’s periodic statements when implementing Phase Two.

NACHA is considering sending a ballot to its Voting Membership in September, 2006 and an implementation date of September 21, 2007 would be proposed for Phase One and March 21, 2008 for Phase Two.

QUESTIONS REGARDING THE PROPOSAL

  1. Do you support requiring a working telephone number to be included in the ACH record for Receiver inquiries about ACH transactions?

    a. Yes ______
    b. No ______

    Please explain.
















  2. Do you agree with requiring the RDFI to provide the contents of the Customer Service Telephone Number Field to the Receiver on the periodic statement for both consumer and corporate members?

    a. Yes ______
    b. No ______

    Please explain.
















  3. Do you agree with placing the customer service telephone number within positions 21-30 of the Company/Batch Header Record?

    a. Yes ______
    b. No ______

    If you answered "no", please identify specific fields you believe are not necessary for processing an ACH transaction and that could be re-defined for the customer service telephone number.
















  4. Please describe the scope of changes that would be required to provide a customer service telephone number on periodic statements.
















  5. Please describe the operational impact this proposal may have on your credit union.
















  6. Do you support a two-phase implementation process?
















  7. Do you support the implementation dates?

    a. Phase One – September 21, 2007 Yes _____ No _____
    b. Phase Two – March 21, 2008 Yes _____ No _____
    c. If you do not support these dates, please suggest an implementation date you believe more appropriate.
















  8. Please provide any additional comments.
















Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Lilly Thomas • Assistant General Counsel • (202) 508-6733 • lthomas@cuna.com
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com