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Faster is Better: What you need to know about Same Day ACH

Jun 23, 2019

It is finally summer, and I am looking forward to going on vacation and taking a good long road trip. 

Over the years my family and I have taken a few road trips to the national parks. Some trips have taken us a few days to arrive at our destination and some did not go as planned and we never made it to our destination. 

On one trip, despite having the car checked prior to our departure, it broke down more than once with multiple visits to the car repair shops. We finally gave up and headed back home, renting a U-Haul and towing the car. Our plans to visit the Grand Canyon were postponed for a few years. We did eventually get to see the Grand Canyon but the second time we decided to take a flight there to make sure we made it.

Flying made the travel time quicker and allowed us more time for seeing the sights.

Although sometimes the experience is in the journey, there are situations — like our second trip — where faster is better.

One of these situations is getting your money faster. 

We would all like to receive deposits into our account as fast as possible. The National Automated Clearing House Association (NACHA) recognized this, and from 2016 to 2018implemented a faster payments solution in Same Day ACH. 

Same Day ACH will be enhanced in the next three years with the first change effective beginning September 20, 2019.The change will provide faster funds availability for ACH credits. 

Receiving Depository Financial Institutions (RDFI) should plan to be in compliance, with which will require: 

  • First Same Day processing window ACH credits will be required to be available to the receiver for withdrawal by 1:30 p.m. on the RDFI local time.
  • All non-Same Day ACH credits, including all Standard Entry Class (SEC) codes, received by the RDFI by 5:00 p.m. on the RDFI local time the day prior to settlement would be required to be available to the receiver by 9:00 a.m. on the settlement date. This is a change from the current requirement to make funds available by the end of the settlement date for all SEC codes. Only ACH credits with a PPD code are currently required to be available by 9:00 a.m.
  • In addition, second Same Day processing window ACH credits will be required to be available to the receiver for withdrawal by 5:00 p.m. on the RDFI local time.

A second enhancement will become effective March 20, 2020 and will increase the dollar limit for a Same Day ACH to $100,000 for each transaction. The current limit is $25,000. 

Financial institutions will need to discuss these changes with their originators or third-party senders and verify systems are changed to allow for the higher dollar limit.

NACHA also plans to add an additional processing window that will allow Originating Depository Financial Institutions - an extra two hours to originate Same Day transactions. This will extend the time for submission of a Same Day ACH file from 2:45 p.m. ET (11:45 a.m. PT) to 4:45 p.m. ET (1:45 p.m. PT). The effective date for this change is expected to be March 19, 2021.

With these changes comes a journey to reassess ACH processes and verify you are prepared for the faster payments and the expansion of ACH services planned. 

It is important to be aware of these changes, assess the risks involved and put your own plan in place to ensure the financial institution is ready. Sometimes faster is better — especially when it means expanded services to your account holders. 

Wipfli can assist you on this journey and help with your preparation for compliance with these and other ACH rule changes. Please reach out to your Wipfli relationship executive for additional information.

Author(s)

Teresa Francis
Teresa Francis, CIA, AAP
Senior Manager, Internal Audit
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