CUNA Regulatory Comment Call

October 24, 2003




NACHA-The Electronic Payments Association has issued a request for comments on a proposal to require that a biller (Originator) provide the consumer (Receiver of Accounts Receivable (ARC) Entries) with the option to choose not to have a share draft/check converted to an ACH entry. Comments on the proposal are due to NACHA by December 1, 2003 and to CUNA by November 20, 2003.

The request for comment proposes to modify the NACHA Operating Rules in the following ways:

Please send your comments to CUNA by November 20, 2003. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at and Assistant General Counsel Michelle Profit at; or mail them to Mary and Michelle c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004.

In addition, CUNA recommends that credit unions respond directly to NACHA because NACHA tabulates results to its surveys and factors those results in when it develops final changes. If you would like to respond directly to NACHA and copy CUNA you may do so by using the NACHA survey form at Comments sent directly to NACHA should be sent to Maribel Bondoc, Network Services Assistant, NACHA, 13665 Dulles Technology Drive, Suite 300, Herndon, VA 20171, fax: (703) 787-0996 or email:, no later than Monday, December 1, 2003. Please provide CUNA a copy by sending your comments to Mary Dunn at or Michelle Profit at


  1. Does your credit union support the modification of the NACHA Operating Rules to require the Originator (biller) to provide the Receiver (consumer) with a method to opt out of ARC check conversion? Please explain.

  2. If your credit union supports the opt out, does your credit union support the requirement that Originators send a notification to the Receiver about this option? If yes, why? If no, why not?

    If you do not support explicit notification, please check what kind of notification you support.
    ____ Originator provides phone number on bill to contact if questions
    ____ Originator reacts if consumer contacts biller
    ____ Other (please specify):

  3. Does your credit union support the suggested frequency of the Originator providing notice where the Originator would provide the Receiver this notice prior to the receipt of the first source document and at least once in each subsequent 12-month period? Why?

    If not, please explain why and mark the preferred frequency of notification below.

    ____ One time notice
    ____ Notice with every bill
    ____ Notice more often than once every 12 months
    (how often? _______________)
    ____ Notice less often than once every 12 months
    (how often? ________________)

  4. NACHA is considering adding a sunset provision to the proposal. Does your institution believe that a sunset date, a date when the rule will automatically expire, should be established for this proposed rule amendment? If not, why not? If yes, why?

  5. If yes, what should be the sunset date for the proposed rule? Please check one

    One Year: _____
    Two Year: _____
    Five Years: _____
    Ten Years: _____
    Other (please specify): _____

  6. If a consumer did not receive the opt-out notice, the RDFI could return the entry using Return Reason Code R10 (Notice Not Provided). Does your credit union believe that a unique return reason code should be created to address this situation? If yes, why? If no, why not?

  7. Please describe the benefits and disadvantages of this proposal to your operations.

  8. Please submit your name, address, and phone number.

Eric Richard • General Counsel • (202) 508-6742 •
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 •
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 •
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 •