Executive Summary

•  NACHA - the Electronic Payments Association has issued another proposed rule to address certain compliance and operational topics on the ACH network.

•  Specifically, this proposed rule would amend five specific areas of the NACHA Operating Rules:

      1. Recrediting Receiver - Removal of the Fifteen-Calendar-Day Notification Timeframe – The proposed amendment would remove the fifteen-calendar-day notification period associated with a Receiving Depository Financial Institution’s (RDFI’s) obligation to promptly recredit a consumer account for an unauthorized debit entry, and align the RDFI’s recredit obligation with its ability to transmit an extended return entry.

      2. TEL Entries - Field Inclusion Requirements/Data Content For Payment Type Code Field – The proposed amendment would revise the field inclusion requirement for the payment type code field of a TEL entry, changing the field from an “Optional” to a “Required” field. This amendment also would remove the option to space-fill this field for single entry TEL entries to standardize data content for all Standard Entry Class Codes bearing this field.

      3. Clarification of RDFI Warranties for Notification of Change – The proposed amendment would modify Notifications of Change (NOC) to clarify 1) the RDFI’s warranties made on its transmission of a NOC or Corrected NOC, and 2) the Originating Depository Financial Institution’s (ODFI’s) warranties made on the usage of corrected data within subsequent transactions.

      4. Valid Characters for ACH Records – The proposed amendment would clarify the data specifications to include a reference stating that extended ASCII characters are permissible within ACH entries.

      5. Disclosure Requirements for POS Entries – The proposed amendment would establish an Originator/Third-party service provider obligation to provide consumer receivers with certain disclosures when providing those consumers with cards used to initiate ACH Point of Sale (POS) entries.

•  NACHA believes these changes would benefit ACH network participants and would help: resolve compliance or operational concerns, eliminate requirements that no longer add value to ACH network users, improve ACH processing efficiency, and lower ACH operating costs.

•  CUNA is interested in how this proposed rule would affect credit union operations and compliance on the ACH network.

•  Comments for the proposed rule are due to NACHA by October 24, 2014; please submit your comments to CUNA by October 13, 2014.

•  For further details, please visit the NACHA request for comment summary ; the proposed modifications to the NACHA Rules; their summary presentation ; and their ACH participant survey.

•  If you have any questions or comments, please contact CUNA Assistant General Counsel for Regulatory Research Dennis Tsang at dtsang@cuna.com.

Questions to Consider Regarding the Proposed Rule

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* 1. Does your credit union support the proposed changes to the NACHA Operating Rules in these five areas? Why or why not?

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* 2. Any other concerns, comments, or suggestions?

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* 3. (Optional) What is your credit union's asset size?

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* 4. (Optional) Please provide information about yourself and your credit union.

Thank you for your input and time - CUNA Regulatory Advocacy Team