New ACH Rules

Things today move faster than ever before, so it’s no surprise that NACHA is changing the way ACH processing is handled. As of Sept. 23, financial institutions will be required to adhere to a new set of rules regarding ACH processing, known as the “Same Day ACH” rule. Many financial institutions still download and process ACH manually every morning. With September just around the corner, this rule change could cause major growing pains.

Today, most ACH payments are settled one to two business days after the transaction occurs, and most Receiving Depository Financial Institutions (RDFIs) are only processing ACH files once daily. The rule change will “start the move toward three ACH network processing times daily, instead of just one (NerdWallet).” Beginning in September, Originating Depository Financial Institutions (ODFIs) will be able to submit Same Day ACH files in two new clearing windows provided by ACH operators:

  • A morning submission deadline at 10:30 a.m. ET, with settlement occurring at 1:00 p.m..
  • An afternoon submission deadline at 2:45 p.m. ET, with settlement occurring at 5:00 p.m.. (NACHA)

“Basically, the Federal Reserve is expanding the number of times it drops ACH files to financial institutions,” Josh Higgins, SMA Solutions’ product specialist, says. “ACH payments are a huge part of any financial institution’s day, so many will be looking to automate this process to improve customer service for their account holders and reduce stress on the IT department.”

Phase One of the implementation will only apply to credit transactions. By September 2017, both debit and credit transactions will need to be processed the day they’re received. One way financial institutions can keep up with the new rule, without adding staff or jeopardizing overall productivity, is to implement a set of automated workflows that will download and process ACH files on its own.

Automating ACH

SMA Solutions’ flagship product, OpCon, can automate almost any process on any environment, no matter the operating systems, platforms or applications, including ACH processing. Many OpCon users, like Lori Hernandez of 1st United Credit Union, are already automating ACH processing, so they’re ready for September:

“Same Day ACH is just around the corner but here at 1st United Credit Union, we’re not stressing over it. Our team uses automation for our ACH posting already, so when September comes around, all we have to do is change a process frequency and we’re compliant. We don’t need additional staff and there are no extra costs. Automation is the key here, and OpCon provides that.”

To prepare for Same Day ACH, Frandsen Financial knew they had to look towards automation for help. A recent article in American Banker stated that before automation, the $1.5 billion-asset bank was “barely keeping up with the existing payments framework.” After installing OpCon, IT staff members no longer spend their days downloading and copying files, and they are ready for Same Day ACH.

Many organizations, however, are not aware that they can automate ACH. If an organization has access to FedLine Command, or FedLine Direct, OpCon can automatically download all ACH files to the core system as soon as they are available. OpCon then processes the files on its own. For those who download their files manually, OpCon will also process the files as soon as they are made available.

Whichever road an institution chooses, OpCon will improve operational efficiency by reducing processing times and allowing IT staff to spend their time working on other initiatives.

Contact us at contact@smasolutions.it or by filling out to form below to find out more; your account holders will thank you.