ARLINGTON, Va.–NAFCU wrote NACHA generally in favor of itsTransaction Origin Identification Proposal, part of a NACHAinitiative to implement a comprehensive risk managementstrategy.

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

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

“We believe that clear identification of an entry can helpresolve this problem and facilitate resolution of problems relatedto unauthorized ACH entries and reduce overall risk to the ACHnetwork,” NAFCU wrote. However, there is still the problem, hepointed out, of Originators changing their names or using multiplenames. Berger added, “NAFCU recommends that NACHA, in going forwardwith its comprehensive risk management strategy, examine possibleways of reducing the risk to the ACH network posed by multiple andchanging identities of Originators.”

While NAFCU supported changes in the identificationrequirements, Berger said that NAFCU is “concerned about theefficacy and cost efficiency of the proposed changes to the BatchControl record.” If implemented as proposed, it would require“significant system changes and multiple read of each file.” NAFCUsuggested expanding the Company/Header Record to include the newfields instead.

CUNA submitted similar comments. However, the trade associationpointed out, “Requiring the identification of Third-Party Sendersinvolved in the origination of a transaction would help in NACHA'srisk monitoring efforts, but we believe this would requiresignificant program changes for certain credit unions that have noThird-Party Senders.”

Additionally, CUNA wondered about the effectiveness of requiringthe name of just the Third-Party Sender with the direct contractualrelationship with the Originator. “Not including all Third-Partiesinvolved in a transaction in the ACH record creates inconsistencyin risk management monitoring,” according to CUNA.

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