ARLINGTON, Va.–NAFCU wrote NACHA generally in favor of its Transaction Origin Identification Proposal, part of a NACHA initiative to implement a comprehensive risk management strategy.

NACHA's proposal would require that a recognizable name of the ACH transaction originator be provided in the company name field. Originators would have to provide phone lines for customer service inquiries and include them in the ACH record for use by the Receiving Depository Financial Institutions. Finally, third-party senders must be identified under the proposal.

“NAFCU generally supports the Proposal as a means to lower the number of ACH transactions that are returned as unauthorized…” NAFCU's letter, signed by Senior Vice President of Government Affairs Dan Berger, read. He noted that NAFCU had heard of problems from its member credit unions aS RDFIs.

“We believe that clear identification of an entry can help resolve this problem and facilitate resolution of problems related to unauthorized ACH entries and reduce overall risk to the ACH network,” NAFCU wrote. However, there is still the problem, he pointed out, of Originators changing their names or using multiple names. Berger added, “NAFCU recommends that NACHA, in going forward with its comprehensive risk management strategy, examine possible ways of reducing the risk to the ACH network posed by multiple and changing identities of Originators.”

While NAFCU supported changes in the identification requirements, Berger said that NAFCU is “concerned about the efficacy and cost efficiency of the proposed changes to the Batch Control record.” If implemented as proposed, it would require “significant system changes and multiple read of each file.” NAFCU suggested expanding the Company/Header Record to include the new fields instead.

CUNA submitted similar comments. However, the trade association pointed out, “Requiring the identification of Third-Party Senders involved in the origination of a transaction would help in NACHA's risk monitoring efforts, but we believe this would require significant program changes for certain credit unions that have no Third-Party Senders.”

Additionally, CUNA wondered about the effectiveness of requiring the name of just the Third-Party Sender with the direct contractual relationship with the Originator. “Not including all Third-Parties involved in a transaction in the ACH record creates inconsistency in risk management monitoring,” according to CUNA.

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