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NAFCU letter to NACHA – The Electronic Payments Association on its request for comments on Same Day ACH
(February 10, 2015) — Below is NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt’s letter to NACHA – The Electronic Payments Association regarding its request for comments on Same Day ACH.
In the letter, Hunt says NAFCU appreciates NACHA’s new request for comment on this issue and emphasizes that the association’s members are supportive of faster payments, but still have concerns with implementing Same Day ACH.
“NAFCU continues to believe that an industry driven response is needed to implement faster payments,” Hunt says in the letter. “Furthermore, any solution that speeds up payments should thoroughly involve all business, operations, risk, technical, fraud and innovation teams.”
Given that it appears NACHA will likely move forward with Same Day ACH, Hunt says “NAFCU would like to strongly urge NACHA to implement its suggested phased-in approach to implementation.”
February 6, 2015
Ms. Maribel Bondoc
Manager, Network Rules
NACHA – The Electronic Payments Association
13450 Sunrise Valley Drive, Ste. 100
Herndon, VA 20171RE: Same Day ACH
Dear Ms. Bondoc:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents the interests of our nation’s federal credit unions, I write regarding NACHA – The Electronic Payments Association’s request for comments on Same Day ACH.
NAFCU appreciates NACHA’s new request for comment on this issue and would like to emphasize that our members are generally supportive of faster payments, but still have questions and concerns with implementing Same Day ACH. NAFCU continues to believe that an industry driven response is needed to implement faster payments. Furthermore, any solution that speeds up payments should thoroughly involve all business, operations, risk, technical, fraud and innovation teams. We look forward to working with NACHA, the Federal Reserve and industry partners on faster payments.
In particular, there are still questions from our members regarding the new Same Day ACH clearing windows and settlement times. For many, there does not yet appear to be enough valid use or business cases identified to validate a clear cost-to-benefit analysis of such a network. In general our members support the ten use cases, but are unconvinced of the full market benefit and may not in fact adopt all of these use cases. While consumers will benefit from real-time funds transfers, the proposed solution will be “next day” settlement for many regular consumer purposes. This marginal improvement may not outweigh the costs necessary to implement and support these new clearing windows and settlement times. While it is an incremental improvement for consumers, it comes with a major expense to financial institutions, as it will affect both the basic transaction processes in place and the technology that supports them.
Many of our members also have concerns relative to fraud. It does not appear that the security and fraud risks related to shorter clearing windows settlement times have been fully analyzed or mitigated and the impact of possible NSF fees for consumers. Additional compliance challenges may also be presented as it relates to dealing with SARS, OFAC, BSA/AML, etc. with less time to process in the proposed shorter settlement windows.
As it appears that NACHA will likely move forward with Same Day ACH, NAFCU would like to strongly urge NACHA to implement its suggested phased-in approach to implementation. In addition, we would like to highlight that a mandatory Same Day ACH program without interbank fees would create an undue burden on financial institutions that act as RDFIs only. Resolving this inequity will be a key for participation moving forward.
Thank you for the opportunity to comment and please feel free to contact me with any questions at chunt@nafcu.org.
Sincerely,
Carrie R. Hunt
SVP of Government Affairs and General Counsel