Update at a Glance

April 7, 2008

NACHA Rule Change Requires Identifiable Names in ACH Transaction Entries

NACHA — The Electronic Payments Association, has announced a change to its operating rules (effective June 20, 2008) that requires automated clearing house (ACH) transaction originators to clearly identify themselves as the transaction source in their ACH files.

By requiring that ACH transaction originators use a name (in the 'company name' field) that is readily identifiable by receivers, the new rule is designed to reduce the number of unrecognizable entries that have resulted in costly investigations and exception handling for financial institutions.

To ensure that your organization is in full compliance with the new rule change, BNY Mellon Working Capital Solutions' (WCS') ACH customers will need to ensure that all of their company name listings (including all division names) that appear in ACH transaction name fields are "identifiable" (i.e., contain a recognizable trade name) by June 20.

Previous to this rule change, originators had been able to use any descriptor (such as telephone numbers or other descriptive statements) rather than clearly identifying the party originating the transaction. Such entries had the potential to cause confusion for receivers, triggering investigations, returns and customer service intervention by the originating financial institutions.

The new rule provides guidance on company identification requirements for specific types of ACH transactions, and in cases in which the originator of the transaction is not the ultimate payee or payor. The company name location is on the batch record in the third field, positions 5-20.

For more information about the latest NACHA rule change, call us at 1 800 424-3004 or e-mail us at treasury@bnymellon.com.