TCH, CBA buy into same-day ACH proposal, but CUNA balks

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The Clearing House and the Consumer Bankers Association filed a comment letter on February 6, 2015 in support of NACHA’s proposal to establish ubiquitous, same-day ACH processing and settlement capability. However, in its own comment letter, the Credit Union National Association cited “significant concerns” about the plan.

“This comprehensive proposal established the incentives necessary to help ensure financial institutions of all sizes have the ability to better meet consumer and business needs by taking advantage of same-day ACH capabilities,” Dave Fortney, senior vice president for product development and management at The Clearing House, said in a press release. “The proposal responsibly seeks to establish a phased-in approach and provides the functionality and flexibility necessary to accommodate customers no matter what time zone they are in.”

“The proposal lays out a well-balanced plan to begin the process of bringing the U.S. payment system into the 21st century,” David Pommerehn, vice president and senior counsel for the Consumer Bankers Association, said in the press release. “Establishing a sound system for same-day ACH clearing and settlement is an essential step in moving payments faster.”

According to TCH and CBA, the NACHA proposal balances the needs of originating depository financial institutions and receiving depository financial institutions by taking into account the benefits and costs of same-day ACH.

In particular, it recognizes that customers originating payments, which would derive the most value from faster ACH clearing and settlement, would be most likely to pay ODFIs (Originating Depository Financial Institutions) for same-day ACH services, while customers receiving payments, which do not control the timing or speed of ACH transactions, would not be likely to pay RDFIs (Receiving Depository Financial Institutions ) for a same-day service.

Yet the cost of implementation would fall primarily on RDFIs, TCH and CBA said. Hence the proposal includes a per-entry interbank fee paid by an ODFI to the respective RDFI of a same-day transaction.

For its part, CUNA suggested that certain allowances should be made for smaller CUs that would be forced to shoulder a high opportunity cost for the implementation of same-day ACH.

CUNA supports NACHA’s objective to provide a faster payments option on the ACH network,” Luke Martone
, CUNA senior director of advocacy and counsel, wrote in a comment letter. “However, we have significant concerns about the costs and impact the proposal will have on credit unions and third parties that provide services to them. We urge NACHA to minimize implementation, ongoing, and compliance costs on credit unions, as well as on corporate credit unions and other processors affected by these proposed changes.

Martone suggested several ways in which NACHA could mitigate the cost burden for CUs:

  • NACHA should minimize costs of implementing same-day ACH on credit unions;
  • NACHA should consider alternative approaches, and potential exemptions for small institutions;
  • NACHA should provide delayed compliance deadlines;
  • New same-day ACH settlement schedule should accommodate smaller institutions;
  • NACHA should exclude certain higher-risk transactions from same-day ACH; and
  • NACHA should coordinate with the Federal Reserve and other entities.


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