Automated Clearinghouse (ACH) Overview

The ACH network, through which electronic payments are distributed and settled, has existed since the early 1970s.

As the industry develops new and innovative uses for ACH, and, as both ACH activity and the number of participants in the network (including third parties) grows, risks to national banks engaged in ACH activity can be complex and not readily apparent. National banks, therefore, must have the expertise to identify ACH risks and be able to implement risk management processes to appropriately manage ACH risk.

NACHA OPERATING RULES CHANGES

Three amendments to NACHA Operating Rules became effective in 2004. The most important changes introduced by the amendments are described below.

Accounts Receivable Conversion (ARC) Opt-out Amendment
(Effective June 11, 2004)

This amendment requires originators of ARC debits to allow consumers to opt out of ARC check conversion and to establish reasonable procedures under which consumers may notify originators that their checks are not to be converted to ARC debits. While not mandated by this NACHA rule amendment, the OCC also encourages national banks that are originators of ARC debits to:

• Provide consumers with a clear and conspicuous notice of their right to opt-out;
• Establish procedures to apply any consumer opt-out requests to all checks involving the consumer's checking account; and,
• Provide consumers with a telephone number they may call for any inquiries related to the ARC process.

Apply Online