Effective Now: New Third-Party Sender Registration Rule

11/3/2017 - By Janice Weisz, AAP

Attention all Originating Depository Financial Institutions (ODFI), the Third-Party Sender Registration Rule is now in effect.  In a previous FAQ for the new NACHA rule, I addressed common concerns regarding this Third-Party Sender Registration Rule.  If you are unsure if your institution has any Third-Party Senders, I have also addressed some ways to help identify these types of relationships

Below are some key points to assist ODFI’s through this registration process and to inform you of additional requirements to keep in mind once the initial registration process has been completed.  

Third-Party Sender Registration Is Now Open

The Third-Party Sender Registration period has now begun.  The National Automated Clearing House (NACHA) has provided the platform to begin submitting registration information, which can be accessed through NACHA's Risk Management Portal; then to register, click the “Register or Manage Your Third-Party Sender Relationships” tab.  There is no cost to register and ODFI’s have from now till March 1, 2018, to submit initial registration information.  

ODFI’s With NO Third-Party Senders 

ODFIs with no Third-Party Senders must register with NACHA the following information: 

  1. the ODFI’s name;
  2. the name, title, telephone number, email address, and street address for a contact person at the ODFI; and
  3. a statement acknowledging that the ODFI has no Third-Party Senders.

ODFI’s With Third-Party Senders

ODFIs with Third-Party Senders must register with NACHA the following information for each Third-Party Sender:

  1. the ODFI’s name;
  2. the name, title, telephone number, email address, and street address for a contact person at the ODFI;
  3. the name of the Third-Party Sender and its principal city and state location;
  4. the ODFI’s identification numbers(s) used in entries transmitted for the Third-Party Sender (routing and transit number); and
  5. the company identification(s) of the Third-Party Sender. 

Registration Confirmation

Once registered, NACHA will confirm each registration by sending the ODFI an email confirmation.  The email will contain a copy of the completed form, based on the data input by ODFI.  Be sure to maintain evidence of the registration information for future audits.

Don’t forget to register!!  Failure to register a Third-Party Sender(s) with NACHA, or failure to register as having no Third-Party Sender relationships, would be a Class 2 Rules Violation and the ODFI may be fined up to $100,000 per month until the situation is resolved.   

Additional Requirements Going Forward

  • Keep Registration Information Current:  The registration information must be updated on the Third-Party Sender within 45 days following any change to the information previously provided, including whether the Third-Party Sender relationship has ended.  
  • Onboarding A New Third-Party Sender:  When onboarding a new Third-Party Sender, the ODFI must provide the initial, basic registration information for the Third-Party Sender within 30 days of originating the first entry.
  • Discovered an Unregistered Third-Party Sender:  If you become aware that an unregistered originating customer is acting as a Third-Party Sender, the ODFI must register that Third-Party Sender within 10 days of becoming aware.

Staying in compliance can be challenging, if you have any questions or need assistance regarding this new Rule and registration process, email me or a member of our Financial Institutions Team so we can help you through the process. 

About the Author | Janice Weisz, AAP
Janice is a consultant in the Financial Institutions Advisory Group at Saltmarsh, Cleaveland & Gund. Janice has been working with financial institutions since 2001 with an emphasis on operations, compliance, audit and internal controls. She currently provides ACH compliance, internal audit, NACHA compliance, and other consulting services to the firm’s financial institution industry clients.

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