ODFI Return Rate Reporting Subsection Page OR 36 Effective September 18, Improving ACH Origination Quality. What will you learn?

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1 Improving ACH Origination Quality Regional Payments Associations, through their Direct Membership in NACHA, are specially recognized and licensed providers of ACH education, publications and support. Regional Payments Associations are directly engaged in the NACHA rulemaking process and Accredited ACH Professional (AAP) program. NACHA owns the copyright for the NACHA Operating Rules & Guidelines. The Accredited ACH Professional (AAP) is a service mark of NACHA. What will you learn? After this course, you ll be able to: Define the upcoming ACH Rules changes Explain the impact that the changes for improving ACH origination quality will have upon your financial institution Discuss with other participants about their preparations and lessons learned for the impending Rules changes Prepare an action plan to ensue your financial institution is ready for the Rules changes ODFI Return Rate Reporting Subsection Page OR 36 Effective September 18, 2015

2 Unauthorized Entry Return Rate Threshold 1.0% 0.5% Sept Administrative Return Rate Level Returns related to debit entries Overall Return Rate Level Returns for any reason related to ALL debit entries Excludes RCK entries

3 Monitoring Are you currently monitoring for unauthorized entries? Administrative returns? If you are monitoring these, explain how it is you do this, including any products you may be using. Collected Data Share what you are doing with the information being monitored. Are there internal communications between the area monitoring return activity and staff that need to know? If so, give details about what you are doing. Potential Issue What are some proactive strategies to employ to resolve a written request from NACHA?

4 Authorizations Give an example of how you work with your Originators to ensure they understand the authorization requirements for the entries they initiate. Authorizations Have you reviewed your Originator s authorization process to see how they ensure routing and account number information is correct? If so, explain your review process. Subsection Page OR 30 Effective September 18, 2015

5 Improper Reinitiation Practices Initiating an entry in an amount greater or less than the amount of the previously returned entry Reinitiating an entry that was returned unauthorized Initiating an entry that NACHA reasonably believes represents an attempted evasion of the reinitiation rules Company Name Company Name Company ID Company ID Amount Amount Company Entry Description RETRY PYMT Share how you communicated this Rule change to your Originators.

6 What has your institution done to prepare itself as an Originator (e.g. loan payments) for the formatting change. If using an automated reinitiation process, are third-parties involved? If so, how did you make them aware of this change? Section 1.11 Page OR 4 Effective October 3, 2016

7 IAT entries will NOT be included Assessment of Impact What kind of assessment have you done in preparation for this change? Assessment of Impact Have you gathered processing stats? Share what data you are collecting.

8 Assessment of Impact Have you determined what, if any, financial impact this will have on your institution? If so, explain what you did as part of this analysis. Originator Have you determined if you are going to pass the fee along? If you plan to, please give your rationale for doing so. When you receive an unauthorized return, how are you investigating or communicating with your Originator to determine if the payment was properly authorized? RDFI Have you calculated the estimated revenue? Will the fee help offset your administrative costs associated with unauthorized returns? As an RDFI, where do you plan to code the revenue you receive?

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