lindsey-becker
By Lindsey Becker, Compliance and Internal Audit Supervisor

According to the National Automated Clearing House Association (NACHA), beginning March 16, 2018, receiving depository financial institutions (RDFIs) will now be required to make funds available from same-day automated clearing house (ACH) credits to their depositors by 5:00 p.m. at the RDFI’s local time. Additionally, originating financial institutions (ODFIs) will have the ability to submit files of same-day ACH payments through two new clearing windows provided by the ACH operators, including:

  • A morning submission deadline at 10:30 a.m. ET, with settlement occurring at 1:00 p.m.
  • An afternoon submission deadline at 2:45 p.m. ET, with settlement occurring at 5:00 p.m.

As outlined by NACHA, nearly all types of ACH payments, including credits and debits are eligible for same-day processing. However, international transactions (IATs) and high-value transactions above $25,000 will not be eligible.

Three-Phase Process

In an effort to move ACH payments faster while also easing implementation, NACHA designated the rule to go into effect across a three-year span divided into separate phases. Phase one (effective Sept. 23, 2016) required RDFIs to make credit entry funds available at the end of the processing day. As a follow-up to phase one, phase two (effective Sept. 15, 2017) required credit and debit entry funds be available at the end of the processing day. Now in its last phase, NACHA put a deadline of 5:00 p.m., RDFI local time, for credit and debit entry funds to become available.

General Rule for Availability of Credits

While the final phase may seem straight forward, NACHA outlines the new rule to include the following stipulations:

Not a Same-Day Entry
For a credit entry that is not a same day entry, an RDFI must make the amount of the credit entry received from its ACH operator available to the receiver for withdrawal no later than the end of the settlement date of the entry, subject to its right to return the entry under these rules.

Same-Day Entry
For a credit same-day entry, an RDFI must make the amount of the credit entry available to the receiver for withdrawal no later than 5:00 p.m. in the RDFI’s local time on the settlement date of the entry, subject to its right to return the entry under these rules and except as noted below.

Time Zones
An RDFI is required to make available funds from same-day ACH credits no later than 5:00 p.m. as it relates to its members’ or customers’ local time zone.

Unauthorized Credit Entry
An RDFI that reasonably suspects that a credit entry is unauthorized is exempt from these requirements, subject to applicable legal requirements.

Remember, NACHA will be on the lookout after March 16 to ensure your credit union or community bank is in compliance with the new rule. Failure to implement the provisions properly could result in hefty fines. Need additional guidance on implementing the rule or conducting a thorough ACH audit? Doeren Mayhew’s auditors stand ready to assist with your next ACH audit or other regulatory compliance services. Contact them today!