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Nacha's Differentiating Unauthorized Return Reasons Rule - Phase 2 Becomes Effective April 1, 2021

3/3/2021 - By Janice Weisz, AAP

Nacha is implementing the Differentiating Unauthorized Return Reasons Rule in two phases. Phase 1 became effective on April 1, 2020, and Phase 2 becomes effective on April 1, 2021. 

Under Phase 1 (effective April 1, 2020), the Return Reason Code R11 “Customer Advises Entry Not in Accordance with the Terms of the Authorization” was re-purposed to be used for the return of a debit that was authorized by the receiver, but some type of error occurred (i.e., wrong date, wrong amount, debited but not credited, etc.). For additional Nacha Rule requirements regarding Phase 1, please reference my March 16, 2020 blog post.

Currently, Nacha Rules require ODFIs to pay an Unauthorized Entry Fee of $4.50 to the respective RDFI for each ACH debit entry (except for an IAT entry) that is returned to the ODFI bearing Return Reason Code R05, R07, R10, R29, or R51. 

Under Phase 2 (effective April 1, 2021), the existing Unauthorized Entry Fee of $4.50 will also apply to each ACH debit entry (except for an IAT entry) that is returned to the ODFI bearing Return Reason Code R11.  This part of the Rule will be implemented by the ACH Operators, and the associated fees will be billed/credited on financial institutions’ monthly statements of charges.

For more information, you can visit Nacha’s website.

Staying in compliance can be challenging, if you have any questions or need assistance preparing for these new Nacha Rules, email me or a member of our Financial Institutions Team so we can help.

About the Author | Janice Weisz, AAP
Janice is a consultant in the Financial Institution 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, NACHA compliance, internal audit and other consulting services to the firm’s financial institution industry clients. Connect with Janice on LinkedIn!


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