The Federal Reserve Board put its stamp of approval on same-day ACH Wednesday, but not withoutobjections from members of the credit union industry.

A review of letters sent to the Fed during the public commentperiod highlights two of the most controversial parts of thenew rules: The requirement that receiving depositoryinstitutions accept same-day ACH transactions, and the cost of those transactions.

Paul Guttormsson, the director of compliance services andregulatory counsel for the Wisconsin Credit Union League, saidmandatory participation will strain the already thin ranks of smallcredit unions.

“Wisconsin credit unions – as small institutions – would incurgreater expenses from this proposal than larger ACH participantswould incur,” Guttormsson wrote in a letter to the Federal Reserve.“As of March 2015, Wisconsin's 159 credit unions had a median assetsize of just $32 million. At that size, a credit union is likely tohave only about 10 employees in total (full- and part-time). Yetthose employees are expected to handle not only ACH processing, butto provide all of the credit union's other member services.”

Guttormsson and Cherie Monson, who is general counsel and vicepresident of legal services at Eastman Credit Union, also saidcredit unions should have the choice to opt into sending andreceiving same-day ACH. The $3.2 billion Eastman Credit Union isheadquartered in Kingsport, Tenn. and has 161,000 members.

“Since the inception of the FedACH SameDay Service in 2010, RDFIparticipation has been optional,” Monson wrote. “According to theBoard, fewer than 100 depository institutions use the service. ECUbelieves lack of participation is ultimately due to anindustry-wide belief that the benefit of such service is outweighedby the increased operational and financial costs required toprocess same-day transactions.”

Not everyone had a problem with mandatory participation,however.

“If Same Day ACH was optional, and should largest financialinstitutions be the only participants utilizing Same Day ACH,smaller institutions such as PCFCU would see a significant impactto the ability to service our members,” James Morrell,president/CEO of Peninsula Community FCU in Shelton, Wash., wrote.“The relative impact on rural communities such as those we servewould be even greater.” Peninsula FCU has $158 million in assetsand 18,000 members.

Commenters also spoke out about the $0.052 interbank fee pertransaction for originating depository institutions.

Guttormsson said with that rate, which is about 37% lower thanwhat the Fed originally proposed, it will take close to 16 yearsfor financial institutions to recover their costs of implementingsame-day ACH.

“That is hardly an acceptable return on investment for anycredit union,” he added.

The Missouri Credit Union Association, the Indiana Credit UnionLeague and the Georgia Credit Union Affiliates expressed similarconcerns.

Even Navy Federal, the nation's largest credit union at $70billion in assets and with 5.7 million members, appearedskeptical.

In its letter to the Federal Reserve, President/CEO CutlerDawson said, “Navy Federal is among the largest ACH receivers byvolume in the U.S.; however, even at our volume, the (same-day ACH)volumes projected by NACHA are likely to be insufficient togenerate income to cover our one-time and ongoing expenses.”

Some have all but written the costs off.

“RDFIs will likely never fully recover their initial expenses,”AlaskaUSA Federal Credit Union's vice president of electronicservices, Joel Swanson, wrote. “It is more likely that existingtechnological changes already in progress will result in other(non-ACH) interconnected networks providing immediate, good-fundsbased financial transactions in the near term (far less than 15years).” His credit union has $5.9 billion in assets and 543,000members.

“To fully understand what can occur in 15 years, one only needremember that just 10 years ago none of the following technologiesexisted: Smartphones, tablets, NFC mobile payments, Low-EnergyBluetooth, EMV, P2P payments, QR codes, Apple Pay and so on,” hesaid.

The new rules will begin to take effect almost exactly one yearfrom now.