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Automated Clearing House (ACH) Rule Changes

The NACHA Operating Rules are the foundation for every ACH payment. Below, we list the NACHA rule changes that will go into effect throughout 2020 and 2021. Please visit www.nacha.org for more information.

March 20, 2020: Increasing the Same Day ACH Dollar Limit

 

Taking effect on March 20, 2020, this rule increases the per-transaction dollar limit for Same Day ACH transactions from $25,000 to $100,000.

 

April 1, 2020: Differentiating Unauthorized Return Reasons – Phase 1

 

The rule repurposes an existing return reason code (R11) that will be used when a receiving customer claims that there was an error with an otherwise authorized payment. Moving forward, the use of a distinct return reason code (R11) enables a return that conveys this new meaning of “error” rather than “no authorization.” Return Reason Code R11 will be defined as “Customer Advises Entry Not in Accordance with the Terms of the Authorization.” It will have a 60-day return timeframe. With an R11 return, an Originator would be permitted to correct the underlying error, if possible, and submit a new Entry without being required to obtain a new authorization.

 

June 30, 2020: Supplementing Data Security Requirements – Phase 1

 

The existing ACH Security Framework, including its data protection requirements, will be supplemented to explicitly require large, non-FI Originators, Third-Party Service Providers (TPSPs) and Third-Party Senders (TPSs) to protect deposit account information by rendering it unreadable when it is stored electronically. Implementation begins with the largest Originators and TPSPs (including TPSs). Phase 1 initially applies to those with an annual ACH volume of 6 million transactions or greater.

 

March 19, 2021: Supplementing Fraud Detection Standards for WEB Debits

 

As the rule currently exists, ACH Originators of WEB debit entries are required to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. Effective March 19, 2021, the screening requirement will be supplemented to make it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” This supplemental requirement applies to the first use of an account number or changes to the account number.

 

March 19, 2021: Expanding Same Day ACH

 

This new rule expands Same Day ACH availability by 2 hours each business day. The timing of this new processing window is intended to balance the desire to expand access to Same Day ACH through extended hours with the need to minimize impacts on financial institutions’ end-of-day operations and the re-opening of the next banking day. Final implementation of this new rule is contingent upon receiving timely notification from the Federal Reserve Board of Governors of changes to Federal Reserve services necessary to support it.

 

April 1, 2021: Differentiating Unauthorized Return Reasons – Phase 2

 

The re-purposed returned reason code R11 would become covered by the existing Unauthorized Entry Fee. This part of the rule will be implemented by the ACH Operators and, as with the current fee, is billed/credited on their monthly statements of charges.

 

June 30, 2021: Supplementing Data Security Requirements – Phase 2

 

Large, non-FI Originators, Third-Party Service Providers (TPSPs) and Third-Party Senders (TPSs) with an annual ACH volume of 2 million transactions or more will be required to protect deposit account information by rendering it unreadable when it is stored electronically. Phase 1 of this rule required those with 6 million transactions or greater, while Phase 2 brings the new threshold down to 2 million transactions or greater.

 

June 30, 2021: Limitation on Warranty Claims

 

Once in place, this new rule will limit the length of time in which a receiving depository financial institution (RDFI) will be permitted to make a claim against the originating depository financial institution's (ODFI) authorization warranty. This change will establish a more equitable allocation of liability, because receivers will have a responsibility to review statements and report unauthorized activity in a timely manner. 

 

June 30, 2021: Reversals and Enforcement

 

The overarching purpose of these two rules is to deter and prevent, to the extent possible, the improper use of reversals and the harm it can cause.

 

Effective June 30, 2021, the Reversals rule will expand the permissible reasons for a reversal to include a "wrong date" error and it will establish formatting requirements for reversals, beyond the current standardized use of the Company Entry Description field. Additionally, the rule will explicitly permit an RDFI to return an improper Reversal. 

 

Effective January 1, 2021, the Enforcement rule will further define an egregious violation and allow the ACH Rules Enforcement Panel to determine whether a violation is egregious, and to classify an Egregious Violation as a Class 2 or 3 Rules Violation. 

 

September 17, 2021: Meaningful Modernization

 

The overarching purpose of these rules is to improve and simplify the ACH user experience. The rules will facilitate the adoption of new technologies and channels for the authorization and initiation of ACH payments, reduce barriers to the use of the ACH, provide clarity and increase consistency around certain ACH authorization processes, and reduce certain administrative burdens related to ACH authorizations. 

 

 

 

For a complete description on each of these rules, please visit www.nacha.org.

 

 

 

 

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