CUNA, NAFCU Support Back Office Check Conversions

WASHINGTON-CUNA and NAFCU were generally supportive of a proposal to permit merchants and originating financial institutions to convert checks to ACH debits at the point of purchase during back office processing. CUNA and NAFCU told NACHA-the Electronic Payments Association-that its proposal allowing this conversion of checks up to $25,000 without `Auxiliary On-Us fields’ typically used for business checks should be beneficial for credit unions. CUNA also expressed its support for a few other aspects of NACHA’s proposal, but asked that it revise its definition of Point of Purchase entry to conform with recent amendments to Regulation E. “We encourage NACHA to amend the proposed definition in Section 12.1.43 to clarify that the Receiver does not have to provide the check solely to effect a transfer through subsequent conversion to an ACH debit entry during back office processing,” CUNA wrote. NAFCU asked that NACHA help with the consumer education effort that will be necessary to make the general public aware of back office conversions and make consumers feel more at ease with them. “Accordingly, NAFCU recommends that NACHA assist ACH participants with their educational efforts and provide media outreach to the public about Back Office Conversion,” NAFCU’s letter read. NAFCU also recommended against the 14-day destruction requirement of the original document but supported the consumer’s right to opt-out for the near term.