September 2017: Same Day ACH Debits
The National Automated Clearing House Association (NACHA), the organization that governs the ACH network, will implement a rule change that allows the initiation of Same Day ACH debit payments of $25,000 or less, with funds available to the receiver by the end of the receiving financial institution’s processing day. Same Day ACH will be available for debits starting September 15, 2017. All ACH transaction types are eligible, except for International ACH Transactions (IATs).
NACHA’S Same Day ACH rollout began in September 2016 with the introduction of Same Day ACH for credit entries. Starting in 2018, receiving financial institutions must make Same Day ACH transactions funds available to the receiver by 5:00 pm local time
September 2017: Third Party Sender Registry
The Third Party Sender registry is being created to improve the overall quality of the ACH Network and promote appropriate due diligence among Originating Depository Financial Institutions (ODFIs) processing for Third-Party Senders (TPS).
The new rule will require all ODFIs to register their TPS customers with NACHA, providing the following information regarding each TPS for which the ODFI provides ACH services.
- TPS Name
- TPS Location (City, State)
- Routing Number
- Company ID(s)
After the initial registration, NACHA may request supplemental information about a TPS regarding any potential risk event. A risk event is defined as “cases in which NACHA believes that a TPS in the ACH network poses an escalated risk of (i) financial loss to one or more Participating (Depository Financial Institutions) DFIs, Receivers or Originators, (ii) violation of the (NACHA) Rules or Applicable Law, or (iii) excessive returns.”
For additional information regarding these rule changes, or to request a copy or access to the latest ACH Rules from PNC, please contact your Treasury Management representative.
October 2016: Unauthorized Entry Fee
To improve the overall quality of the ACH Network by reducing returns, NACHA is implementing a rule that applies to ACH debit transactions that are returned as “unauthorized” by the Receiver.
The rule introduces a fee of $4.50, assessed to the originating financial institution, for each ACH debit transaction that is returned as unauthorized. The fee will be passed to the receiving financial institution to compensate them for expenses related to servicing and returning the transaction for their customer. The rule applies to the following return reason codes:
- R05 – Unauthorized Debit to Consumer Account Using Corporate SEC Code
- R07 – Authorization Revoked by Customer
- R10 – Customer Advised Unauthorized, Improper, Ineligible or Incomplete Transaction
- R29 – Corporate Customer Advises Unauthorized
- R51 – Item Related to RCK Entry is Ineligible or RCK Entry is Improper
The fees for unauthorized debit returns as of October 3, 2016 would be applied to debits originated as early as August 1, 2016. NACHA will evaluate the fee amount every three years.
Please Note: The fee is not applicable to International ACH Transactions (IATs).
September 2016: Same Day ACH
The rule will enable the option to initiate same day ACH payments through new ACH Network functionality. This option is in addition to the existing ACH network processing capabilities. The rule will be implemented over three phases with Phase 1 beginning on September 23, 2016.
Phase 1 will support ACH credits only. All transaction types are eligible (except International ACH Transactions (IATs)) up to $25,000 per transaction. All receiving financial institutions must be able to receive same day ACH payments and make funds available to the receiver by the end of the receiving financial institution’s processing day in Phase 1.
There is an additional fee to originate Same Day ACH entries and no additional fee to receive Same Day ACH entries.
September 2015: Return Rate Changes
1. Current monthly unauthorized debit return rate threshold reduced from 1% to 5%. Your total number of ACH debit returns with Unauthorized Return Reason Codes should not exceed 0.5% of your total ACH debits originated. Should you exceed the stated threshold, we may contact you to inquire on the reason for the high return rate. The following Return Reason Codes are considered unauthorized reason codes:
R05 - Unauthorized Debit to Consumer Account Using Corporate SEC Code
R07 - Authorization Revoked by Customer
R10 - Customer Advises Not Authorized
R29 - Corporate Customer Advises Not Authorized
R51 - Item is Ineligible
2. Established monthly ACH debit administrative return rate threshold of 3%. Your total number of ACH debit returns with Administrative Return Reason Codes should not exceed 3% of your total ACH debits originated. Should you exceed the stated threshold, we may contact you to inquire on the reason for the high return rate.
The following Return Reason Codes are considered Administrative Return Reason Codes:
R02 - Account Closed
R03 - No Acct/Unable to Locate Acct
R04 - Invalid Account Number
3. Established monthly overall ACH debit return rate threshold of 15%. Your total number of ACH debit returns for all Return Reason Codes should not exceed 15% of your total ACH debits originated. Should you exceed the stated threshold, we may contact you to inquire on the reason for the high return rate. All ACH debit returns regardless of Return Reason Code for all Standard Entry Class codes except RCK (Re-presented Check Entries) are considered for this calculation.
4. Re-initiation of ACH debits required to contain "Retry Pymt" in the Company Entry Eescription field. If ACH debits that are returned unpaid with R01 – Insufficient Funds or R09 – Uncollected Funds Return Reason Codes and are subsequently re-presented for payment, the description “RETRY PYMT” is required to be included in the Company Entry Description field. If you currently originate debit re-presented files, you are required to update the Company Entry Description prior to submitting. Not updating the Company Entry Description may result in the RDFI returning the transaction with an R10 - Customer Advises Unauthorized, Improper, or Ineligible Return Reason Code. If you have selected PNC’s “ACH Auto Debit Re-presentment” service feature, no action is required from you. PNC will automatically change your Company Entry Description to include “RETRY PYMT.”
March 2015: Removal of Notification of Change and Rule Changes Related to Dishonored Returns
1. Removal of Notification of Change - CO4 Change Code. Previously, Receiving Depository Financial Institutions (RDFIs) would send a Notification of Change – C04 to request a correction to the Receiver’s name on future ACH transactions. This sometimes created challenges for Originators, ODFIs and RDFIs. An example was when the Biller (Originator) could not make the requested name change due to contractual or other reasons while the Original Depository Financial Institution faced NACHA violations for not updating the name. To eliminate this risk the C04 code will be removed as a valid change code.
Impact to ODFIs / Originators
If you are an ACH Originator and the Receiver’s name on the ACH transaction and Receiver’s name at the RDFI do not match, rely on contracts and records to properly identify the name of the Receiver being credited or debited, without relying on a Notification of Change (NOC) from the RDFI
Impact to RDFIs
When the RDFI discovers a name mismatch, choose one of the following courses of action:
- Post the Entry based solely on account number.
- Return the Entry as R03.
- Assist the Receiver by communicating directly with the ODFI/Originator.
2. Dishonored Returns and Contested Dishonored Returns Related to an Unintended Credit to a Receiver
. There are two new return codes to assist Originators, ODFIs, and RDFIs to rectify situations in which the reversal process resulted in, or didn’t resolve unintended credit to the Receiver.
Originators and ODFIs can use the new R62 (Return of Erroneous Debit or Reversing Debit) only in the following situations:
- When a debit Erroneous Entry and a subsequent credit Reversing Entry are both transmitted to the Receiver’s account, but the erroneous debit is returned while the reversing credit is posted and made available to the Receiver.
- When a credit Erroneous Entry and a subsequent debit Reversing Entry are both transmitted to the Receiver’s account, but the reversing debit is returned while the erroneous credit is posted and made available to the Receiver.
If you are an ACH Originator, you can request that your ODFI dishonor a return in order to correct and resolve an erroneous or unintended credit to a Receiver.
In addition, ensure that R62 is only used when the associated credit entry (the Reversal or the erroneous credit) was not also returned by the RDFI.
RDFI’s can use the new Contested Dishonor R77 (Non-Acceptance of R62 Dishonored Return) if either of the following situations exist.
- the RDFI returned both the erroneous entry and the reversal entry to the ODFI
- the RDFI was unable to recover the funds from the Receiver
January 2015: Return Fee Entry Formatting Clarification
Consumers that received an electronic Return Entry fee posted to their account often times could not link the return fee to an authorized transaction at a merchant. The NACHA rule change clarifies that the Individual Name field in the PPD Return Entry Fee transaction is used to link the fee to the original authorized ARC, BOC, or POP transaction that was returned unpaid. The Individual ID field could contain the Receiver’s name, reference number, identification number or code of the merchant to identify the customer. This change should have no impact on ACH participants as it recognizes current best practice regarding the formatting of fees for check conversion entries.