Frequently Asked Questions: Targeting New NACHA Rule & Requirements

7/25/2017 - By Janice Weisz, AAP

If your financial institution is an Originating Depository Financial Institution (ODFI), make sure that you are aware, informed, and ready to register with the National Automated Clearing House Association (NACHA).  The new Third Party Sender Registration rule will come into effect this September (September 29th to be exact), so let us help you prepare!

Here are answers to some frequently asked questions regarding the upcoming Third-Party Sender Registration Rule, and an updated registration link to access the NACHA Risk Management Portal!

What Does the Rule Require?

The Third-Party Sender Registration Rule will require ODFIs to identify and register their Third-Party Sender customers.  Beginning September 29, 2017, every ODFI will be required to either register its Third-Party Sender customer(s) with NACHA, or provide to NACHA a statement that the ODFI has no Third-Party Sender customers.

Who Does this Rule Apply to?

The Third-Party Sender Registration Rule applies to ALL ODFI’s. Those without Third-Party Sender Customers are only required to acknowledge this in a statement to NACHA.

ODFIs with Third-Party Sender customers are to provide a limited set of initial, basic registration information for each Third-Party Sender that the ODFI should already have in its records.

During the initial basic registration, the ODFI will have to register the following information for each Third-Party Sender:

  • The name and principal business location of the Third-Party Sender;
  • The routing number used in the ACH transactions originated for the Third-Party Senders; and
  • The Company Identification(s) of the Third-Party Sender.  
  • Beyond the initial basic registration, NACHA could request the ODFI to provide additional information about a Third-Party Sender.  This supplemental information is typically requested due to an elevated risk event.  

How Do I Know If I Have Third Party Senders?

ODFI’s should understand how to identify Third-Party Sender relationships and should perform a thorough review of the financial institution’s portfolio of originating customers and identify Third-Party Senders.  To help support the industry with managing and identifying Third-Party Sender relationships, NACHA has developed some tools and resources to help ACH participants, which can be found at NACHA's website.

When is the Registration Period?

The Rule will become effective on September 29, 2017, marking the first day in which the Third-Party Sender registry will become available for ODFIs to begin submitting registration information.  The initial registration period will last through March 1, 2018.  Be sure to keep evidence of the registration information for future audits.

How Do I Register? 

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. 

Preparing and registering for this new rule and its requirements can be challenging. So, if you have any questions or need assistance, email me or a member of our Financial Institutions Team so we can help you through the entire 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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