The changes to the Rules language, as noted below, represented modifications to the NACHA Operating Rules that became effective on September 16, 2011. Although these changes have already been implemented, they are noted here as part of the Minor Impact Issues (Category C) amendment. Please note that the Rules do not contain markings to specifically highlight this new language.
XCK Ineligible Items
Article Two, Subsection 2.5.18.3 (XCK Ineligible Items)
• – removed “items that are rejected during
processing by the ODFI” from the list of ineligible items Recurring TEL Authorization Retention Requirements
Article Two, Subsection 2.5.15.3 (Retention of the Record of Authorization for TEL Entries)
• – added
text to clarify retention requirements for recurring TEL authorizations Correction to Payment Type Code for TEL Entries
Appendix Three, Subpart 3.2.2 (Glossary of Data Elements)
• – revised field inclusion requirement for
the Payment Type Code field from “R” (required) to “O” (optional) Correction to Definition of Improper ARC and BOC Debit Entries
Article Three, Subsection 3.12.2 (Improper ARC, BOC, POP and RCK Debit Entries)
• – deleted Receiver
election of opt out provision as a reason for an improper check conversion entry
January 1, 2012 Implementation Date
KEy cOmPOnEnTS Of rUlE amEnDmEnTS
Updated Definition of Participating Depository Financial Institution
The NACHA voting membership approved a change to remove obsolete language regarding the warranties, liabilities, rights and responsibilities of Associations from the Rules. Text related to these warranties was struck from all sections of the Rules, with an effective date of March 18, 2011. However, the Association reference in the definition of a Participating DFI remained. This amendment modifies the definition in Article Eight, Section 8.61 to delete this reference.
Simplification of Definitions - Entry, Originator, Receiver and Third-Party Sender
The definitions of Originator, Receiver and Third-Party Sender in Article Eight of the Rules contained language that, in addition to describing the appropriate ACH participant, also described types of accounts and the entries these accounts can receive. The entry and account information were not relevant to describing the participant and made the definition difficult to understand. This amendment removes the entry and account text from the Originator, Receiver and Third-Party Sender definitions, and places it in the definition of Entry. This change results in a clearer identification of various parties and a more appropriate placement of account references.
ORxxviii 2012 OPERATING RULES Refinement of Definition of Return Reason Code R23 – Credit Entry Returned by Receiver
The definition and return time frame of Return Reason Code R23 found in Appendix Four, Part 4.2 is based upon when the Receiver notifies the RDFI that an entry should be returned to the ODFI. However, the previous use of the phrase “returned by Receiver” made it sound as if the Receiver had taken possession of the entry and had to send it back to the RDFI, which was not the case. To eliminate this confusion, this amendment changes the text to read “refused by Receiver.” This minor refinement clarifies the action required of the Receiver.
Editing of Appendix Eight Rules Compliance Audit Requirement Language
The Rules Simplification review process revealed that minor updates to the rules compliance audit text in Appendix Eight were necessary. The audit requirements had not been modified to reflect changes resulting from the expanded language in the Risk Management and Assessment rule implemented in 2010. This amendment modifies the related audit requirements to ensure they are stated using the current language.
The process also uncovered three audit provisions that do not have direct citations in the Rules:
• a provision requiring the DFI to address any items related to its previous audit;
• a provision requiring the RDFI to verify that it has returned entries using Return Reason Code R06 – Returned per ODFI’s Request if it has agreed to do so; and
• a provision verifying that the RDFI is aware of the proper use of Return Reason Code R08 – Payment Stopped.
The lack of direct Rules references means these provisions are not mandated under the Rules and, therefore, precluded from being a part of the rules compliance audit. This amendment removes these items from the audit language.
Modifications to Notification of Change Corporate Entry Detail Records
Three discrepancies were discovered with Corporate Entry Detail Records for NOCs and Refused NOCs.
Although Field 8 – Number of Addenda Records of the NOC Corporate Entry Detail Record must be copied from the original entry, the format layout shown in Appendix Five of the 2011 NACHA Operating Rules and Guidelines showed “N/A” for the Field Inclusion Requirement and “Blank” for the Contents field. The Field Inclusion requirement within both the format and the field description are now revised to “Required” to reflect current ACH Operator edit requirements for this field, and the contents have been updated to reflect a “Numeric” value. The description of the Field Inclusion requirement also did not note that this field is mandatory for IAT NOCs. This amendment corrects this discrepancy by adding IAT NOCs to the Mandatory Corporate Entry Detail list.
Field 8 – Number of Addenda Records in the Refused NOC Corporate Entry Detail Record in the 2011 Rules showed that the Field Inclusion Requirement as “Mandatory.” Since the ACH Operators do not edit the field, it should not have a mandatory field inclusion requirement. This amendment changes the Field Inclusion Requirement for Field 8 of the Refused NOC Corporate Entry Detail Record to “Required.”
2012 OPERATING RULES ORxxix
TEcHnIcal SUmmary
The changes to the Rules language, as noted below, represent modifications to the 2012 NACHA Operating Rules. However, because the effective date of these amendments (January 1, 2012) coincides with the effective date of the 2012 rules set, the Rules do not contain markings to specifically highlight this new language.
Definition of Participating Depository Financial Institution
Article Eight, Section 8.61 (Participating Depository Financial Institution)
• – removes reference to
membership in an Association
Definitions of Entry, Originator, Receiver and Third-Party Sender Article Eight, Section 8.33 (Entry)
• – adds references to account types
Article Eight, Section 8.59 (Originator)
• – removes references to account types
Article Eight, Section 8.68 (Receiver)
• – removes references to account types
Article Eight, Section 8.88 (Third-Party Sender)
• – removes references to account types
Definition of Return Reason Code R23 – Credit Entry Returned by Receiver
Article Three, Subsection 3.8.3.2 (Timing Requirements for Credit Entries Returned by Receiver)
• –
modifies title and text to replace “returned” with “refused” and to indicate that the time period for return begins when the Receiver notifies the RDFI that it has refused the entry
Rules Compliance Audit Requirement Language
Appendix Eight, Part 8.2 (Audit Requirements for All Participating DFIs), Item c
• – removes provision
that DFI addresses findings from previous audits, which lacks a direct Rules citation Appendix Eight, Part 8.2 (Audit Requirements for All Participating DFIs), Item f
• - adds new audit
provision regarding DFI risk management and assessment program requirements Appendix Eight, Part 8.3 (Audit Requirements for RDFIs), Item i
• – removes provision regarding RDFIs
returning entries using Return Reason Code R06 – Returned per ODFI’s Request, which lacks a direct Rules citation
Appendix Eight, Part 8.3 (Audit Requirements for RDFIs), Item j
• – removes provision regarding RDFI
awareness of Return Reason Code R08 – Payment Stopped, which lacks a direct Rules citation Appendix Eight, Part 8.4 (Audit Requirements for ODFIs), Item a
• – updates language to reflect Rules
changes effective in June 2010 requiring ODFI origination agreements to include the right of the ODFI to terminate the agreement, and the right of the ODFI to audit the Originator’s or Third-Party Sender’s compliance with the agreement and the Rules
Appendix Eight, Part 8.4 (Audit Requirements for ODFIs), Item c
• – removes outdated language
regarding exposure limits and replaces it with modified language related to the ODFI’s obligations to assess an Originator’s or Third-Party Sender’s ACH activity and risks; monitor its Originator’s and Third-Party Sender’s return activity across multiple settlement dates; enforce restrictions on the types of entries that may be originated; and enforce the exposure limit
Notification of Change Corporate Entry Detail Records
Appendix Three, Subpart 3.2.2 (Glossary of Data Elements), Number of Addenda Records
• – adds
IAT Notification of Change entries to the list of Standard Entry Class Codes for which the Number of Addenda Records is a mandatory field in the Corporate Entry Detail Record; updates the field
ORxxx 2012 OPERATING RULES
inclusion requirements for the Notification of Change and Refused Notification of Change Corporate Entry Detail Records
Appendix Five, Subpart 5.4.3 (Corporate Entry Detail Record Format for Notification of Change)
• –
revises the field inclusion requirement and contents for the Number of Addenda Records Field from
“N/A” and “blank” to “R” (required) and “numeric”
Appendix Five, Subpart 5.4.9 (Corporate Entry Detail Record Format for Automated Refused
•
Notification of Change) – revises the field inclusion requirement for the Number of Addenda Records from “M” (mandatory) to “R” (required)
2012 OPERATING RULES ORxxxi