Sept. 25, 2012 – NAFCU sent two letters to NACHA Monday to express its views on a number of proposals the group is considering, including modifications relating to international ACH transactions and various changes to its operating rules.
NAFCU Regulatory Affairs Counsel Tessema Tefferi, who authored both letters, told NACHA that NAFCU supports the international ACH transaction proposal and would like to see the changes incorporated into NACHA's rules “as quickly as possible.”
Two of the three changes contained in the proposal would allow credit unions to more easily comply with Office of Foreign Assets Control rules and sanctions policies by more clearly identifying the country of origination and ultimate beneficiary within IAT entries. “To the extent that there would be burden on ACH network participants,” Tefferi wrote, “generally, we believe it is justified by the benefit of facilitating OFAC compliance and reducing the associated risk of regulatory sanction and penalty.”
Tefferi also offered the association’s views on several potential changes to NACHA’s operating rules. NAFCU supports a proposal that would permit a receiving depository financial institution to request proof of a non-consumer receiver’s authorization for certain ACH entries or an inbound international ACH entries, and require an originating depository financial institution to provide an accurate record of the receiver’s authorization to the RDFI within 10 banking days without charge, he said. The proposal would provide greater certainty regarding such transactions, Tefferi said, and “enable credit unions and other network participants to more easily manage investigations of unauthorized entries.”
The association also supports NACHA’s proposed clarification on the existing code relative to a stop payment order, though the association is concerned about costs, Tefferi noted. While the proposal would “benefit network participants by allowing them to better understand the stop payment on an individual entry and take appropriate action in response,” it would “impose great costs for credit unions to implement.” With that in mind, Tefferi urged NACHA to provide credit unions with as much flexibility as possible in implementing the proposed code.
One area of concern that Tefferi noted was NACHA’s proposal to amend its rule relating to notifications of change for single entry transactions. The proposal would provide the originator of the transaction discretion on whether to act on a notice of change for single entry transactions. NAFCU opposes this aspect of the proposal, Tefferi said, because providing the originator of the transaction such an option “would likely jeopardize this value and create unnecessary uncertainty.”
Both comment letters will be available online soon.