5/18/2021
Currently, the Rules define a limited number of permissible reasons for reversing entries; but, they do not explicitly address improper uses of reversals. Nacha’s Reversals Rule will explicitly address the improper uses and will expand the permissible reasons for a reversal to include an error in the entry effective date.
Effective June 30, 2021, the Reversals Rule will explicitly state that the following reasons for reversing entries is improper and is therefore prohibited:
Currently, the Rules state that the following reasons for reversing entries is proper and is therefore permitted:
Effective June 30, 2021, the Reversals Rule will also:
ODFIs should educate its Originators and Third-Party Senders regarding the Reversals Rule requirements, to include proper and improper reversing reasons, reversal timeframe requirements, and ACH file formatting requirements.
Originators and Third-Party Senders may want to review their practices, policies and controls regarding the proper use and formatting of reversals.
RDFIs that want to take advantage of the return process should review and update, as needed, policies and practices to facilitate the return of an improper reversal and to provide training to ensure applicable personnel understand the applicable return process requirements.
For more information, you can visit Nacha’s website.
Questions?
Staying in compliance can be challenging, so if you have any questions or need assistance, email paymentadvisors@saltmarshcpa.com or a member of our Financial Institutions Team so we can help.
About the Bank Advisors
The Bank Advisors at Saltmarsh have provided audit, tax and consulting services to a wide range of financial institutions since our founding in 1944, making it the firm’s largest specialty practice and industry of focus. Our Financial Institution Advisory Group has the talent, expertise and insight to help you and your institution thrive. Our team members are also industry leaders who have the knowledge and experience to provide you with unparalleled service and guidance.