Page 11 - GS131201
P. 11
News
ChapterTitle
NACHA proposes ACH transfer originators, such as check cashing stores that offer
money transfer services to consumers.
rule changes NACHA's argument: if an FI that facilitates a money transfer,
called an Originating Depository Financial Institution
(ODFI), had to pay a fee when an exception occurs, it would
ACHA — The Electronic Payments Association have a financial incentive to reduce exceptions by providing
seeks input about how to improve the automat- more oversight over third-party money transfer providers.
ed clearing house (ACH) network. NACHA,
N which oversees the ACH, issued two comple- "Taken together, these proposed rules will contribute to a
mentary proposals designed to enhance the network by holistic, interconnected approach to strengthening ACH
reducing the number of unauthorized ACH transactions network payments," NACHA said.
and allowing the association to better police ACH rule vio-
lators. Risk and enforcement
The first proposal, titled "ACH Network Risk and NACHA said the first proposed rule would reduce
Enforcement," addresses "outlier" organizations that originate exceptions by strengthening risk controls. For example,
money transfers for consumers that disproportionately implementing thresholds on the return rate of exceptions
result in insufficient funds notices, called "exceptions." Such would "cause ODFIs to focus on reducing the number
aborted money transfers clog the ACH network and are of returns and thereby reducing the number of risky
an expense largely shouldered by the financial institutions transactions entering the ACH network," NACHA stated.
(FIs) that receive bad money transfer requests and must The specific changes sought by NACHA include:
return them. By amending the ACH rules, NACHA seeks
the authority to bring enforcement actions against those • Reducing the existing return rate threshold for
violators. unauthorized debits from 1 percent to 0.5 percent
• Establishing a return rate threshold for account data
The second proposal, "Improving ACH Network Quality," quality returns (that is, administrative returns) at 3
would establish economic incentives, or disincentives as percent, and an overall debit return rate threshold
the case may be, for FIs to tighten up the policies of money of 15 percent
ChapterTitle
NACHA proposes ACH transfer originators, such as check cashing stores that offer
money transfer services to consumers.
rule changes NACHA's argument: if an FI that facilitates a money transfer,
called an Originating Depository Financial Institution
(ODFI), had to pay a fee when an exception occurs, it would
ACHA — The Electronic Payments Association have a financial incentive to reduce exceptions by providing
seeks input about how to improve the automat- more oversight over third-party money transfer providers.
ed clearing house (ACH) network. NACHA,
N which oversees the ACH, issued two comple- "Taken together, these proposed rules will contribute to a
mentary proposals designed to enhance the network by holistic, interconnected approach to strengthening ACH
reducing the number of unauthorized ACH transactions network payments," NACHA said.
and allowing the association to better police ACH rule vio-
lators. Risk and enforcement
The first proposal, titled "ACH Network Risk and NACHA said the first proposed rule would reduce
Enforcement," addresses "outlier" organizations that originate exceptions by strengthening risk controls. For example,
money transfers for consumers that disproportionately implementing thresholds on the return rate of exceptions
result in insufficient funds notices, called "exceptions." Such would "cause ODFIs to focus on reducing the number
aborted money transfers clog the ACH network and are of returns and thereby reducing the number of risky
an expense largely shouldered by the financial institutions transactions entering the ACH network," NACHA stated.
(FIs) that receive bad money transfer requests and must The specific changes sought by NACHA include:
return them. By amending the ACH rules, NACHA seeks
the authority to bring enforcement actions against those • Reducing the existing return rate threshold for
violators. unauthorized debits from 1 percent to 0.5 percent
• Establishing a return rate threshold for account data
The second proposal, "Improving ACH Network Quality," quality returns (that is, administrative returns) at 3
would establish economic incentives, or disincentives as percent, and an overall debit return rate threshold
the case may be, for FIs to tighten up the policies of money of 15 percent
