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Historically, the
National Automated Clearinghouse Association (NACHA) has provided the
guidance and framework that has allowed the volume of ACH payments to
grow. Today, all ACH payment types and industries operate under the
NACHA guidelines, with one exception – the Department of Treasury. The
Treasury follows the Code of Federal Regulation (31 CFR Part 210
adopted in April 2002), which allows certain exceptions to the NACHA
rules for federal agencies.
One of the
exceptions currently in place allows federal agencies to convert
business checks to ACH transactions, a practice not allowed in the
private sector. Another exception allows agencies to capture the
state-allowable service fee on returned Point-of-Purchase (POP) or
Accounts Receivable Conversion (ARC) transactions without having to
obtain the signature of a consumer. All they have to do is notify the
consumer that the service fee will be collected. These transactions are
not allowed under the NACHA guidelines governing the private sector. In
what could amount to a significant expansion of these exceptions for the
Treasury, there is a proposed amendment that would allow, among
other things, the agencies to:
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Capture the
state-allowable service fee on cleared RCK transactions without
requiring the signature of the affected consumer.
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Expand the checks
eligible for check conversion to include money orders, travelers
checks, credit card checks, etc.
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Expand the use of
the ARC application to other uses that may otherwise be deemed a POP
transaction.
Solutran does not
support, nor object to, the exceptions allowed the Treasury. But these
exceptions do create confusion over what is acceptable and what is not
for private-sector companies.
Within our industry,
we often hear of instances where a competitor of ours tells a client,
“If the Treasury can do it, so can you.” If a private-sector company
adopts this mentality, it puts both itself and the originating
depository financial institution, at risk.
But there’s a larger
issue here. Having separate guidelines for the private and public sector
compromises the effectiveness and value of the rule-making process.
NACHA’s
Response
On October 20, 2003
NACHA issued its response to the proposed changes. Generally, NACHA is
opposed to the amendments and has garnered the support of a number of
organizations including the America’s Community Bankers, the American
Bankers Association, the Association for Financial Professionals and the
Independent Community Bankers of America. Solutran will continue to
monitor the progress of the proposed amendment and provide an update
should significant changes occur. Meanwhile, if you would like to read
the proposed amendment visit this link
http://www.fms.treas.gov/ach/210_cfr_proposed_2003.pdf.
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