NAFCU provides NACHA with CU perspective on early funding availability
NAFCU Senior Counsel for Research and Policy Andrew Morris Friday responded to NACHA's request for comment (RFC) regarding the risks of early funding availability in the ACH network.
In the letter, Morris noted some credit union receiving depository financial institutions (RDFIs) may make funds available earlier than the effective entry date due to demand for faster funds availability and overall member benefit.
"While NAFCU acknowledges that providing funds earlier than the effective entry date may pose risks to an originating depository financial institution (ODFI) when an ACH was originated erroneously, risk allocation under the operating rules is generally appropriate and incentivizes ODFIs to maintain high quality origination practices," wrote Morris.
When an ACH is initiated by error or by fraud, Morris noted, the ODFI can attempt to recover funds through a reversal (when permissible), or by contracting the RDFI and requesting a return.
"However, a formal rule to reallocate risk, […] could burden credit union RDFIs with additional uncertainty," he reasoned.
Morris offered the association’s support for current NACHA rules, noting the rules have enabled credit unions to improve their members’ timely access to funds. Read the full letter.
Fall 2022 Supervisory Highlights Part I: Auto Servicing, Consumer Reporting, Credit Card Account Management, and Debt Collection
Examination & Enforcement Operations
Add to Calendar 2022-11-29 09:00:00 2022-11-29 09:00:00 Personalizing the Member Experience About the Webinar A new frontier of connected digital and human interactions awaits credit unions. Members are shifting behaviors toward digital sales and service, making keeping up with industry leaders feel like an endless digital arms race. There is no guarantee that higher investment levels will lead to better outcomes. It will be up to credit unions to understand their members and to deliver proactive, intelligent advice that differentiates them from their competitors. An integrated approach to financial data-driven personalization encompasses both digital and human interactions. Through this webinar, you will discover how Cal Coast Credit Union works to simplify its members' lives, offer them the best customer service available, and ultimately help them achieve financial prosperity. Attendees will learn how to: Overcome the main challenges credit unions face, Keep up with the growing demands of members, Identify where to focus digital investment to drive member impact Create a cohesive and long-lasting member experience across all channels. Credit unions are ideally positioned to deliver unified advice to members across digital and banker channels. With a deep understanding of members' needs and a personalized experience, the credit union can compete and stay ahead of the curve in an exciting new era. REGISTER NOW Web NAFCU firstname.lastname@example.org America/New_York public
Accounts Examination & Enforcement
Get daily updates.
Subscribe to NAFCU today.