CUNA Regulatory Comment Call


August 11, 2000

REVISED PILOT
PPD ACCOUNTS RECEIVABLE TRUNCATED CHECK DEBIT ENTRIES

EXECUTIVE SUMMARY

NACHA proposes a revision to the pilot allowing Originators (merchants originating the transaction) to utilize the Prearranged Payment and Deposit (PPD) format to truncate checks received from consumers through the U.S. mail for payment for goods or services. In the pilot, the consumer sends a check payment by U.S. mail to the remittance address as directed by the merchant. Upon receipt of the check, the merchant captures payment information from the MICR (Magnetic Ink Character Recognition) line, including the routing number, account number, and serial number. The merchant also enters the amount of the check and the name of the payee as indicated on the check. This information is then used to create an ACH debit to the consumer's account for the face value of the item. The revised short-term rule would extend the current pilot that is set to end on December 14, 2000 for an additional fifteen months -- to March 14, 2002.

This request for comment also recommends that the pilot be further revised to:

Please click here or contact Catherine Orr to see a more detailed description of the revised pilot proposal.

Comments are due to NACHA by August 28, 2000. Please submit your comments to CUNA by August 21, 2000. Please feel free to fax your comments to CUNA at (202) 371-8240; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com or to Regulatory Advocacy Attorney Catherine Orr at corr@cuna.com or mail them to Catherine or Mary in c/o CUNA's Regulatory Advocacy Department, 805 - 15th Street, N.W., Suite 300, Washington, D.C. 20005.

NACHA has prepared its own survey that includes the questions at the end of this comment call. Please click here or contact Catherine Orr for a complete copy of that survey. Surveys and comments may be sent directly to NACHA to the attention of Debbie Barr, AAP, Assistant Director, Network Services, NACHA, 13665 Dulles Technology Drive, Suite 300, Herndon, VA 20171, fax: (703) 787- 0996, e-mail: dbarr@nacha.org. Please forward any copy of this survey to CUNA as well.

QUESTIONS REGARDING THE REVISED PILOT

  1. Are you an RDFI or ODFI? _____________________

  2. Does your institution believe that the PPD Accounts Receivable Truncated Check Debit Entry application is an appropriate application for the ACH Network?

    Yes ______ No ______ Why or why not?











  3. Would your institution offer this service to your customers if it were an expanded pilot program (i.e., the revised short-term rule)?

    Yes ______ No ______ Why or why not?











  4. Are your customers currently expressing an interest in this service?

    Yes ______ No ______

  5. Does your institution agree with the recommendation to remove the restriction limiting PPD Accounts Receivable Truncated Check Debit Entries to amounts under $2,500?

    Yes ______ No ______

    Why or why not?











    Would the elimination of the $2,500 limit make this application more attractive to your institution?

    Yes ______ No ______

    Why or why not?













  6. Does your institution believe that the statistical data that is proposed to be gathered from pilot participants is adequate?

    Yes ______ No ______

    Why or why not?













    Is there other information that should also be gathered?

    Yes ______ No ______

    If yes, please specify what other information should be gathered.













  7. FOR ODFIs:
    Will the requirement to utilize a processing window within which PPD Accounts Receivable Truncated Check Debit Entries must be made available to the RDFI after 2:00 p.m. (RDFI's local time) on the banking day prior to the Settlement Date cause any processing impact to your institution?

    Yes ______ No ______

    Why or why not?













  8. Does this Request For Comment adequately address the impact of this proposed change to your institution?

    Yes ______ No ______

    Why or why not?













  9. Does your institution approve of the short-term (fifteen month pilot) rule amendment as proposed in this Request for Comment?

    Yes ______ No ______

    If no, please list the specific changes to the proposal that would cause your organization to be in favor of a pilot test for this proposal:

    A.





    B.





    C.





    D.





  10. Does your institution agree that the recommended implementation date for a short term rule of December 15, 2000 through March 14, 2002?

    Yes ______ No ______

    If no, what time frame would be adequate for your institution?

    _____ December 15, 2000 through December 2001

    _____ December 15, 2000 through September 2001

    _____ Other, please specify: ________________________________________

  11. Please include any additional comments/suggestions below (attach additional pages if needed):

Name: ________________________________________________________________



Title: __________________________________________________________________



Organization: ____________________________________________________________



Street Address: __________________________________________________________



City/State/Zip Code: ______________________________________________________



Phone:________________________________Fax: ______________________________



Email Address: ___________________________________________________________



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