ACH 2010 Rule Changes

5/27/2010

By Fran Sponsler, CRCM, CCBCO

Effective March 19, 2010, the Automated Clearing House rules changed to affect the manner in which banks treat and process ACH stop payment requests. The language frequently used in the written statements regarding unauthorized ACH debit transactions changed as well. The main change to processing stop payment requests on ACH debit is to ensure a more aligned process between Federal Reserve Board Regulation E and the National Automated Clearing House Association Operating Rules. Previously, a stop payment order made on an ACH debit was treated as a request to make a one-time stop on a particular debit entry, regardless if the entry was a single occurrence entry or a recurring entry. The ACH stop payment order also contained similar language that was used for stop payments on checks, disclosing that the stop payment would remain in effect for six months from the date of the stop payment order; until the debit entry has been stopped; or until the receiver withdraws the stop payment order, whichever occurs earliest.

The rule change now requires financial institutions to remove the time period in which the stop payment will expire on an ACH entry. The change also ensures that if the stop payment order applies to more than one entry, the order will remain in effect until all entries have been stopped. Additionally, in cases where a receiver requests to block all future payments related to a specific authorization or originator, the new rule allows the Receiving Depository Financial Institution (RDFI) to request a written statement from the receiver confirming that the authorization had been revoked with the originator.

Previous to the rule changes, RDFIs utilized a form known as Written Statement Under Penalty of Perjury (WSUPP), which contained the requirement for the receiver to make the statement regarding an unauthorized debit entry “under penalty of perjury” or by “affidavit.” However, the use of those terms may have resulted in some jurisdictions to require the statement be notarized. Therefore, in order to improve the efficiency with which unauthorized debits are processed by the RDFI, the form has been renamed “Written Statement of Unauthorized Debit.”

The new rules have also defined and standardized the minimum information required on a written statement for an unauthorized ACH debit entry. The following information will be required in a written statement:

• Receiver's printed name and signature;
• Receiver's account number;
• Party debiting the account (the payee), as identified to the receiver;
• Posting date of the entry;
• Dollar amount of the entry;
• Reason for return;
• Signature date;
• Receiver assertion that the written statement is true and correct; and,
• Receiver assertion that the receiver is an authorized signer or has authority to act on the account.

Implementation of the changes to ensure compliance requires RDFIs to modify stop payment forms and systems to accommodate the new rule changes. Written statements will also have to be revised to remove certain language and to include the minimum required information.