NACHA Cuts Down On Excessive Transaction Return

The Electronic Payments Association officially put the ACH Network Risk and Enforcement Rule into effect as of late last week.

NACHA said the amendment to its Operating Rules will help to reduce the number of ACH transactions that result in exceptions and returns.

“This Rule amendment is part of NACHA’s ongoing efforts to maintain and improve the strength and quality of the ACH Network for the consumers, governments, businesses and financial institutions that move their money via ACH,” Janet O. Estep, president and CEO of NACHA, said in a company release. “The Rule demonstrates the value of the financial industry coming together through private-sector rule-making to address practices that may result in harm to consumers.”

The ACH Network Risk and Enforcement Rule institutes a few changes, all of which are geared toward reducing disproportionate levels of exceptions and returns. These instances not only impose additional costs on Receiving Depository Financial Institutions (RDFIs) but also have the potential to impact their customers as well.

With the new rule in place, NACHA said it will have an increased ability to identify and enforce any “outlier” Originators that may be the cause of exceptions and returns as well as enforce rules related to unauthorized transactions.

“Excessive levels of returned transactions impose costs, both financial and reputational, on the ACH Network and its participants,” Estep added. “The new Rule will help reduce these costs, and ultimately increase customer satisfaction with the ACH Network by reducing the volume of transactions subject to customer disputes.”

Financial institutions can also expect to see a lowered existing return threshold, from 1.0 percent to 0.5 percent, for unauthorized transactions.

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