“GOONJ” Aap ki soch Aap ki soch aap ki aawaz…!!! aap ki aawaz…!!! EIGHTY 1 mg 2012.
Jordan Morell, AAP, NCP
Transcript of Jordan Morell, AAP, NCP
Presented by:
Jordan Morell, AAP, NCP
Associate Director of Education Services, UMACHA
Tim Thorson, AAP, CTP
SVP & Manager, ACH Operations, Regions Financial Corporation
Overview
Lessons Learned
Phase 2 – Introduction
Topics for Phase 2 ODFI
RDFI
2© Payments 2017; All rights reserved.
4© Payments 2017; All rights reserved.
Functionality Phase 1
Sept. 23, 2016
Phase 2
Sept. 15, 2017
Phase 3
March 16, 2018
Transaction Eligibility ($25,000 limit; IAT not
eligible)
Credits only Credits and debits Credits and debits
New Same Day ACH
Processing
Deadlines
10:30 AM ET and
2:45 PM ET
10:30 AM ET and
2:45 PM ET
10:30 AM ET and
2:45 PM ET
New Settlement
Time(s)
1:00 PM ET and
5:00 PM ET
1:00 PM ET and
5:00 PM ET
1:00 PM ET and
5:00 PM ET
ACH Credit Funds
Availability
End of RDFI’s
processing day
End of RDFI’s
processing day
5:00 PM RDFI local
time
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Individual Entries of $25,000 and under
All Standard Entry Class (SEC) codes Exception International ACH Transactions (IATs)
Automated Enrollment Entries (ENRs)
Non-Monetary Entries Prenotifications
NOCs
Returns All Returns can be processed same day
Eligible Transactions
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Fee is set at 5.2 cents per Same Day transaction to
be paid by the ODFI to the RDFI of the Entry
Review period of
Five, eight and ten years after implementation of
Phase 3
Same Day Entry Fee
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Handling of Effective Entry Dates (EED)
Today’s date: Oct. 25, 2017
Batch EED: 171025
Batch submitted
by 10:30 AM ET
Batch settled 10/25/17, 1:00 PM ET
Same-Day Entry Fee charged
Batch submitted
by 2:45 PM ET
Batch settled 10/25/17, 5:00 PM ET
Same-Day Entry Fee charged
Batch submitted
after 2:45 PM ET
Batch settled 10/26/17, 8:30 AM ET
No Same-Day Entry Fee charged
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Handling of Stale/Invalid Effective Entry Dates
Today’s date:
Oct. 25, 2017
Batch EED:
171024 (stale)
Batch submitted
by 10:30 AM ET
Batch settled 10/25/17, 1:00 PM ET
Same-Day Entry Fee charged
Batch submitted
by 2:45 PM ET
Batch settled 10/25/17, 5:00 PM ET
Same-Day Entry Fee charged
Batch submitted
after 2:45 PM ET
Batch settled 10/26/17, 8:30 AM ET
No Same-Day Entry Fee chargedNote: stale date means a date that is in the past
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RDFIs Identifying Same Day Entries
5225ABC COMPANY 1234567054PPDPAYROLL 1609232671091000310000001
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ODFIs
Did well with identifying before the File was sent but
reporting was an issue after the fact
Processing date vs Effective Entry Date
Vendors
Still seem to be working on this issue
What have you heard?
ODFIs Identifying Same Day Entries
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Still seems to be a challenge for some
How’s balancing going for you?
Internal accounts
Originators’/Receivers’ accounts
Fed Account
Balancing
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How are you accounting for Exceptions?
ODFI
RDFI
Balancing questions
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Will allow both debits and credits to be processed
as Same Day Entries
Balanced Files should be easier to reconcile
As long as the off-setting debit is under the $25,000
and not using an IAT SEC Code
Same Day ACH can reduce credit risk but not
having proper controls could lead to an increase
in risk (fraud)
September 15, 2017 debits go live!
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Consumer debits are transactions that the whole
industry looks at, from NACHA to Regulators
Communicating with customers/members will be
important to ensure they know how Same Day
debits will be handled
Posting
Notice
Disputes
Fees
September 15, 2017 debits go live!
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Be readily identifiable as an authorization
Have clear and readily understandable terms
Including amount, timing of debits
Provide that the Receiver may revoke the
authorization only by notifying the Originator in the
manner specified in the authorization
Authorization reminders
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ODFI warrants to each RDFI and ACH Operator that Entry is properly authorized For an amount that will be due and owing to the
Originator from the Receiver on the Settlement Date
For a sum specified by the Receiver to be paid to the Originator
Unauthorized Debit Entry Debit Entry was initiated for settlement earlier than
authorized
Have clear and readily understandable terms
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Currently
Rule states the notice used for recurring TEL and/or
single-entry needs to be made available prior to the
Settlement Date of the Entry
Updated
Rule states the notice used for recurring TEL and/or
single-entry needs to be made available prior to the
settlement of the Entry
TEL Authorization
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Disclosure requirements (per Reg. E – 2007 Amendment) used to include language that stated that a check converted to an ACH debit may post as soon as the same day Language on same day was no longer required two years later
(2009) but it might be a good idea if using Same Day ACH
Issue? Consumer thinks it’s still a check and won’t clear for a day or two
Could this be a UDAAP issue? You will want to make sure your Originators are being very clear and transparent if processing same-day Check Conversion products
Check Conversion Authorization
12 Noon ET (1200 ET)
4 p.m. ET (1600 ET)
5 p.m. ET (1700 ET)
Issues Balancing
ACH Department
Operations Department
Fed Account
Charging back Originator’s account
Reporting
FI
Originator
Charging back Originator’s account
22
Same Day Return Distribution Windows
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Nothing in the Rules states the timeframe for an ODFI to
provide Return information to its Originators
What is the timeframe your FI provides Return
information?
Is that adequate for your Originators?
ODFI must provide Originator information within two
Banking Days of Settlement Date of NOC
In a same-day environment is that fast enough?
Return/NOC reporting
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What software is being utilized for debit Return
tracking?
Is this the right time to update software?
Return tracking
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Reversals for ODFIs
September 2017
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2
Erroneous File
sent
(ODFI)
Cannot process
SD Reversal
(ODFI)
Could do Next-
Day Reversal
3
Entries Settle
(RDFI)
Could process
Reversal Same
day or next day
(ODFI)
4
Could process
Reversal Same
day or next day
(ODFI)
5
Could process
Reversal Same
day or next day
(ODFI)
6
Could process
Reversal Same
day or next day
(ODFI)
7
8 9
Could process
Reversal Same
day or next day
(ODFI)
10
Could process
Reversal Same
day or next day
(ODFI)
11 12 13 14
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Reversals for ODFIs
September 2017
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2
Erroneous Same
Day File sent
(ODFI)
Entries Settles
(RDFI)
Could process
Reversal Same
day or next day
(ODFI)
3
Could process
Reversal Same
day or next day
(ODFI)
4
Could process
Reversal Same
day or next day
(ODFI)
5
Could process
Reversal Same
day or next day
(ODFI)
6
Could process
Reversal Same
day or next day
(ODFI)
7
8 9
Could process
Reversal Same
day or next day
(ODFI)
10 11 12 13 14
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Remember!
Improving ACH Network Quality Fee is set at $4.50
Accountholder could dispute an Entry according to
the Rules if an Entry posts prior to Settlement Date
With Same Day ACH that can lead to confusion and
misunderstanding
Ensure your Originators have a good understanding
of how Same Day ACH works and that they
informed their Receivers of when payments can
post
Unauthorized Entry Fee
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Ensuring staff is aware of Same Day Return
processing on all transaction types
Communicate options you have to provide your
Originators with Return information
What options are available to you now?
How quickly can information from Return Files be
disseminated to proper departments, if need be?
Balancing
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Always utilize the Settlement Date
Settlement Date is formatted as an Julian Date (001-
365)
If you post incorrectly the implications are
Overdrawing your Receivers’ accounts causing fees
Loss of accountholders frustrated with paying fees
UDAAP concerns (and having the CFPB checking
on you)
A violation of the NACHA Operating Rules with the
potential for a fine
Posting Early
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Options as an RDFI for posting and returning Same
Day
After each settlement time (memo post)
If these create daylight overdrafts, will you charge for
those?
Disclosures
Explain your policies
Terms and Conditions
Update as needed
Returns
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Deriving Returns and NOCs through the Fed Current functionality has limitations Entries available to derive Returns & NOCs are previous
day’s items and older (no current day items available)
Derived Returns, derived NOCs, and paper Returns are processed 2x/day Entries derived by 2:45 pm ET settle at 17:00 (dependent on
Effective Entry Date of current day or older) Entries derived between 2:45pm ET and 2:15 am ET settle at
8:30 am ET the next processing day
Customers cannot take advantage of 13:00 or 17:30 settlements using derived Returns function
Fed Returns
10:30 a.m.ET (1030 ET)
2:45 p.m. ET (1445 ET)
4:00 p.m. ET (1600 ET)
Issues Balancing ACH Department
Operations Department
Fed Account
Reporting FI
33
Same Day Return Processing Windows
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Reminder!
Ensure WSUD is completed prior to processing an
Extended Return regardless if it’s same-day or not
Same Day Returns do not allow you more time to
process a Extended Return
Extended Return Entries must be made available to the
ODFI no later than opening of business on the banking
day following the 60th calendar day following
Settlement Date of original Entry
Extended Returns/WSUD
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Authorization must have clear and readily
understandable terms
Specifically date
TEL Authorization updated
Unauthorized Fee
Distribution Windows
Balancing
Return Reporting
When are Originators receiving reporting for Same
Day Returns. Is it adequate?
ODFI
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Posting Debits
Post by Settlement Date
Same Day Returns
Extended Returns
WSUD Procedures
Internal Same Day Education
Frontline staff
RDFI
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We cannot stress enough about testing!
Federal Reserve
Dates have not been set
Vendors and software providers
Processors
Third-Party Service Providers including, Third-Party
Senders
Originators
ODFI & RDFI
39© Payments 2017; All rights reserved.