Effective September 23, 2016, the Federal Reserve Banks are amending Operating Circular 4, Automated Clearing House Items. As further explained below, the amendment addresses the phase 1 implementation of NACHA’s same-day ACH rules, along with planned enhancements to the FedGlobal® ACH Payments compliance program. Effective October 3, 2016, the Reserve Banks will begin to collect and disburse fees established in NACHA’s ACH rules as a means of improving ACH network quality.
Key revisions made by the amendment in connection with same-day ACH include the following:
- Provisions relating to the Reserve Banks’ collection and disbursement of fees established by NACHA’s rules were revised or introduced as follows:
- Paragraph 1.4(b)(iv) was revised and paragraph 1.6 was added to state that the Reserve Banks may collect and distribute fees established by NACHA’s rules if approved by the Board of Governors of the Federal Reserve System;
- Paragraph 18.2 was revised and paragraphs 18.3 and 18.4 were added to more accurately address the Reserve Banks’ role in collecting NACHA ACH quality fees and same-day entry fees from FedACH® sending banks and distributing those fees to FedACH receiving banks;
- Paragraph 20.1(d) was revised and paragraph 20.2(c) was added to preclude certain claims against the Reserve Banks and to limit Reserve Bank damages for collecting or distributing fees; and
- Paragraph 22.1 was revised to identify the forum for actions against a Reserve Bank related to the collection or disbursement of fees.
- Paragraphs 2.1(q) and 14.3 were revised and paragraphs 2.1(r), 2.1(s), 6.4, and 7.5, as well as paragraph 5 of appendix B were removed to eliminate the opt-in requirements for the FedACH SameDay Service.
- A number of subparagraphs in paragraph 2.1 were redesignated.
- Paragraph 3.4(b) was revised to remove references to TRX and TRC standard entry codes.
- Paragraph 3.5 was revised to state that same-day items that are not released for processing before the day’s final same-day deadline will be processed as next-day items.
- Footnote 1 to paragraph 5.3 was revised to clarify that items pended if a Reserve Bank cannot determine if the sending bank has met its prefunding requirement may settle the next day or may be rejected.
- Paragraphs 7.2 and 10.2 were revised to refer to the revised schedule in appendix B.
- Paragraph 8.1 was revised to accurately describe the revised time schedule in appendix B.
- Paragraph 10.4 was revised to clarify that under certain circumstances the Reserve Banks may cease processing and refuse to settle an item, batch, or file.
- Paragraph 11.1 was revised to align the Reserve Banks’ rights to reverse entries associated with debit items under certain circumstances with the revised schedule in appendix B.
- Appendix B was revised as follows:
- Paragraph 1.3 was revised and paragraph 1.5 was deleted to establish new submission deadlines and settlement schedules for all items;
- Paragraph 2.1 was revised to remove references to same-day items and NACS (National Association of Check Safekeeping) items; and
- Footnote 11 to paragraph 2.2 and paragraphs 3.1. and 3.2 were revised to clarify the settlement times and dates of same-day items.
- New paragraph 4.4 of appendix E was introduced to address same-day settlement of pended batches, and former paragraphs 4.4 and 4.5 have been redesignated paragraphs 4.5 and 4.6, respectively.
- Subparagraph (h) was revised to require FedGlobal ACH Payments participants to provide the Reserve Bank that acts as the gateway operator with information to assist in assessing, monitoring, and managing compliance risk.
- Subparagraph (i) was revised to provide the Reserve Bank that acts as the gateway operator with the option of restricting or terminating a participant’s access to the FedGlobal ACH Payments service if that bank’s participation poses an unacceptable compliance risk.
- Subparagraph(j) was revised to require participants to provide the Reserve Bank that acts as the gateway operator with notification of any public enforcement action against the participant related to cross-border payments within 30 days of the action.
- Former subparagraphs (h) and (i) were redesignated paragraphs (k) and (l), respectively.
Key revisions made by the amendment in connection with the FedGlobal ACH Payments compliance program include the following changes to paragraph 5 of appendix G:
Please review the terms of the amended operating circular carefully. Your continued use of Federal Reserve Bank ACH services on or after September 23, 2016, constitutes agreement to the revised terms.
The official version of the amended operating circular is available through the link below to the Federal Reserve Bank Services website. To request a paper copy of any operating circular, contact your Customer Contact Center.
“FedGlobal” and “FedACH” are registered service marks of the Federal Reserve Banks.