NACHA Approves Third-Party Sender Rule
Starting Sept. 29, 2017, credit unions and other financial institutions that originate ACH transfers must start identifying and registering their third-party sender customers with NACHA, according to an announcement this week by the organization, which sets the rules for and administers the ACH network.
Third-party senders are processing intermediaries between financial institutions and the end users of ACH payments. Under the new rule, credit unions and other originating depository financial institutions on the ACH network will have to provide the names and contact information for every third-party sender they have a relationship with; ODFIs that don’t have third-party sender relationships must provide statements to that effect, according to NACHA.
The registration process will promote customer due diligence and help maintain the quality of the ACH network, NACHA said.
“Third-parties serve a valuable role in the ACH network, supporting many of the users of ACH payments,” NACHA President and CEO Janet Estep said. “Third-party sender registration builds upon other recent rules that enable the ongoing growth of the ACH network while implementing appropriate risk management monitoring.”
NACHA has set up a “Third-Party Sender Identification Tool” to help financial institutions determine whether it is working with an entity that qualifies as a third-party sender and thus falls under the due diligence rule.
The announcement comes 15 months after NACHA — also known as the Electronic Payments Association — greenlighted same-day ACH, which adds two new same-day settlement windows to the ACH network and increases the movement of funds between financial institutions from once a day to three times per day. Same-day ACH also requires all receiving depository financial institutions to accept same-day transactions and the fees that go along with them.
Phase one of that shift begins just a few weeks from now, on Sept. 23.