Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 42597 

AIRAC date State City Airport FDC No. FDC date Subject 

12–Oct–17 ............ VA Quinton ................................. New Kent County ................. 7/0441 8/1/17 RNAV (GPS) RWY 11, Amdt 2A. 

12–Oct–17 ............ VA Quinton ................................. New Kent County ................. 7/0443 8/1/17 RNAV (GPS) RWY 29, Amdt 2A. 

12–Oct–17 ............ VT Barre/Montpelier ................... Edward F Knapp State ......... 7/0446 8/1/17 RNAV (GPS) RWY 35, Amdt 1. 

12–Oct–17 ............ MI Battle Creek .......................... W K Kellogg .......................... 7/0799 8/2/17 RNAV (GPS) RWY 23R, Amdt 1A. 

12–Oct–17 ............ ID Pocatello ............................... Pocatello Rgnl ...................... 7/1022 8/2/17 RNAV (GPS) RWY 21, Amdt 1A. 

12–Oct–17 ............ NJ West Creek ........................... Eagles Nest .......................... 7/1519 8/1/17 RNAV (GPS)-B, Orig. 

12–Oct–17 ............ GA Augusta ................................. Augusta Rgnl At Bush Field 7/2525 8/2/17 RNAV (GPS) RWY 17, Amdt 2A. 

12–Oct–17 ............ NJ Newark .................................. Newark Liberty Intl ................ 7/2703 8/2/17 RNAV (GPS) RWY 4L, Amdt 2B. 

12–Oct–17 ............ IN Fort Wayne ........................... Fort Wayne Intl ..................... 7/2713 8/2/17 RNAV (GPS) RWY 5, Amdt 1A. 

12–Oct–17 ............ CT Windsor Locks ...................... Bradley Intl ............................ 7/2727 8/2/17 RNAV (GPS) Y RWY 6, Amdt 2A. 

12–Oct–17 ............ CT Windsor Locks ...................... Bradley Intl ............................ 7/2729 8/2/17 RNAV (GPS) Y RWY 24, Amdt 3B. 

12–Oct–17 ............ OH Mansfield .............................. Mansfield Lahm Rgnl ............ 7/5241 8/2/17 RNAV (GPS) RWY 32, Orig-D. 

12–Oct–17 ............ OR Salem .................................... Mcnary Fld ............................ 7/5259 8/2/17 RNAV (GPS) RWY 31, Amdt 3. 

12–Oct–17 ............ FL West Palm Beach ................. Palm Beach Intl .................... 7/5263 8/2/17 RNAV (GPS) Y RWY 10L, Amdt 3A. 

12–Oct–17 ............ WI Oshkosh ................................ Wittman Rgnl ........................ 7/5265 8/2/17 RNAV (GPS) RWY 36, Amdt 2A. 

12–Oct–17 ............ OR Portland ................................ Portland-Hillsboro ................. 7/6049 8/2/17 RNAV (GPS) RWY 13R, Amdt 2. 

12–Oct–17 ............ CA Bakersfield ............................ Meadows Field ..................... 7/6052 8/2/17 RNAV (GPS) RWY 30R, Amdt 2. 

12–Oct–17 ............ MD Baltimore ............................... Baltimore/Washington Intl 

Thurgood Marshall.

7/6075 8/2/17 RNAV (GPS) Y RWY 10, Amdt 3A. 

12–Oct–17 ............ NY Elmira/Corning ...................... Elmira/Corning Rgnl ............. 7/6084 8/2/17 RNAV (GPS) RWY 24, Amdt 2A. 

12–Oct–17 ............ MN Duluth ................................... Duluth Intl ............................. 7/6116 8/2/17 RNAV (GPS) RWY 9, Amdt 1B. 

12–Oct–17 ............ NY Syracuse ............................... Syracuse Hancock Intl .......... 7/6593 8/2/17 RNAV (GPS) Z RWY 10, Amdt 2C. 

12–Oct–17 ............ AK Kenai ..................................... Kenai Muni ............................ 7/6828 8/2/17 RNAV (GPS) RWY 20R, Amdt 3A. 

12–Oct–17 ............ PA Allentown .............................. Lehigh Valley Intl .................. 7/6829 8/2/17 RNAV (GPS) RWY 6, Amdt 1A. 

12–Oct–17 ............ SC Charleston ............................ Charleston AFB/Intl .............. 7/6830 8/2/17 RNAV (GPS) Y RWY 33, Amdt 3B. 

12–Oct–17 ............ PA Wilkes-Barre/Scranton .......... Wilkes-Barre/Scranton Intl .... 7/6831 8/2/17 RNAV (GPS) RWY 4, Amdt 1A. 

12–Oct–17 ............ MN Rochester ............................. Rochester Intl ....................... 7/8437 8/2/17 RNAV (GPS) RWY 31, Amdt 1A. 

12–Oct–17 ............ TX Lubbock ................................ Lubbock Preston Smith Intl .. 7/9346 8/2/17 RNAV (GPS) Y RWY 17R, Amdt 2A. 

12–Oct–17 ............ GA Savannah .............................. Savannah/Hilton Head Intl .... 7/9349 8/2/17 RNAV (GPS) RWY 10, Amdt 2. 

12–Oct–17 ............ IA Dubuque ............................... Dubuque Rgnl ....................... 7/9350 8/2/17 RNAV (GPS) RWY 36, Orig. 

12–Oct–17 ............ FL Tampa ................................... Tampa Intl ............................. 7/9375 8/2/17 RNAV (GPS) Z RWY 19L, Amdt 2D. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9450 8/2/17 RNAV (GPS) Z RWY 28L, Orig-A. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9451 8/2/17 RNAV (GPS) RWY 4R, Amdt 1A. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9452 8/2/17 RNAV (GPS) RWY 9L, Amdt 3. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9456 8/2/17 RNAV (GPS) RWY 9R, Amdt 4. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9457 8/2/17 RNAV (GPS) RWY 10C, Amdt 1. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9459 8/2/17 RNAV (GPS) RWY 10L, Amdt 5. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9460 8/2/17 RNAV (GPS) RWY 22L, Amdt 2. 

12–Oct–17 ............ IL Chicago ................................. Chicago O’Hare Intl .............. 7/9462 8/2/17 RNAV (GPS) Z RWY 10R, Orig. 

12–Oct–17 ............ TX Brownsville ............................ Brownsville/South Padre Island Intl.7/9465 8/2/17 RNAV (GPS) RWY 13, Orig. 

12–Oct–17 ............ TX Midland ................................. Midland Intl Air And Space 

Port.

7/9490 8/2/17 RNAV (GPS) RWY 10, Amdt 2B. 

12–Oct–17 ............ TX Dallas .................................... Dallas Love Field .................. 7/9494 8/2/17 RNAV (GPS) Y RWY 31R, Amdt 2. 

12–Oct–17 ............ IL Chicago/Rockford ................. Chicago/Rockford Intl ........... 7/9497 8/2/17 RNAV (GPS) RWY 1, Amdt 1A. 

12–Oct–17 ............ NE Omaha .................................. Eppley Airfield ....................... 7/9733 8/2/17 RNAV (GPS) Y RWY 18, Amdt 3. 

12–Oct–17 ............ MO St Louis ................................. Spirit Of St Louis .................. 7/9740 8/2/17 RNAV (GPS) RWY 8R, Orig-A. 

12–Oct–17 ............ TX Fort Worth ............................. Fort Worth Alliance ............... 7/9868 8/2/17 RNAV (GPS) RWY 34R, Amdt 2B. 

12–Oct–17 ............ MI Pontiac .................................. Oakland County Intl .............. 7/9870 8/2/17 RNAV (GPS) RWY 9R, Orig. 

12–Oct–17 ............ GA Atlanta ................................... Hartsfield—Jackson Atlanta 

Intl.

7/9872 8/2/17 RNAV (GPS) PRM RWY 9L (SIMULTANEOUS CLOSE PARALLEL), 

ORIG–A. 

12–Oct–17 ............ MO St Louis ................................. Spirit Of St Louis .................. 7/9875 8/2/17 RNAV (GPS) RWY 26L, Orig-B. 

12–Oct–17 ............ NC Charlotte ............................... Charlotte/Douglas Intl ........... 7/9878 8/2/17 RNAV (GPS) Y RWY 5, Amdt 3A. 

12–Oct–17 ............ NC Charlotte ............................... Charlotte/Douglas Intl ........... 7/9879 8/2/17 RNAV (GPS) Y RWY 18C, Amdt 3C. 

12–Oct–17 ............ NC Charlotte ............................... Charlotte/Douglas Intl ........... 7/9880 8/2/17 RNAV (GPS) Y RWY 18R, Amdt 1. 

[FR Doc. 2017–19074 Filed 9–8–17; 8:45 a.m.] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 210 

RIN 1510–AA14 

Federal Government Participation in 

the Automated Clearing House 

AGENCY: Bureau of the Fiscal Service, 

Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury, Bureau of the Fiscal Service 

(Fiscal Service) is amending its 

regulation governing the use of the 

Automated Clearing House (ACH) 

Network by Federal agencies. Our 

regulation adopts, with some 

exceptions, the NACHA Operating Rules 

developed by NACHA—The Electronic 

Payments Association (NACHA) as the 

rules governing the use of the ACH 

Network by Federal agencies. We are 

issuing this rule to address changes that 

NACHA has made to the NACHA 

Operating Rules since the publication of 

the 2013 NACHA Operating Rules & 

Guidelines book. These changes include 

amendments set forth in the 2014, 2015, 

and 2016 NACHA Operating Rules & 

Guidelines books. 

DATES: Effective date: September 11, 

2017. 

Applicability date: The amendment to 

§ 210.5 is applicable beginning on April 

1, 2018. The incorporation by reference 

of certain publications listed in the rule 

is approved by the Director of the 

Federal Register as of September 11, 

2017. 

FOR FURTHER INFORMATION CONTACT: Matt 

Helfrich, Senior Program Analyst, at 

215–516–8022 or Matthew.Helfrich@

fiscal.treasury.gov; or Natalie H. Diana, 

Senior Counsel, at (202) 874–6680 or 

natalie.diana@fiscal.treasury.gov. 

SUPPLEMENTARY INFORMATION: 


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42598 Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 

I. Proposed Rulemaking and Comments 

Received 

A. Background 

We published a Notice of Proposed 

Rulemaking (NPRM) on November 30, 

2016, requesting comment on a number 

of proposed amendments to title 31 CFR 

part 210 (part 210). 81 FR 86302. Part 

210 governs the use of the ACH Network 

by Federal agencies. The ACH Network 

is a nationwide electronic fund transfer 

(EFT) system that provides for the interbank clearing of electronic credit and 

debit transactions and for the exchange 

of payment-related information among 

participating financial institutions. Part 

210 incorporates the NACHA Operating 

Rules, with certain exceptions. From 

time to time the Fiscal Service amends 

part 210 in order to address changes that 

NACHA periodically makes to the 

NACHA Operating Rules or to revise the 

regulation as otherwise appropriate. 

Currently, part 210 incorporates the 

NACHA Operating Rules as set forth in 

the 2013 NACHA Operating Rules & 

Guidelines book. NACHA has adopted a 

number of changes to the NACHA 

Operating Rules since the publication of 

the 2013 NACHA Operating Rules & 

Guidelines book. We proposed to 

incorporate in part 210 most, but not all, 

of these changes. We also proposed two 

changes to part 210, related to reversals 

and prepaid cards, that do not stem 

from a change to the NACHA Operating 

Rules. 

We received three comment letters on 

the NPRM. Two of the commenters were 

industry trade associations and the third 

was NACHA. Commenters were 

generally pleased that Fiscal Service 

proposed to adopt most of the 2014, 

2015 and 2016 amendments to the 

NACHA Operating Rules, but 

commented that three of the exceptions 

to the NACHA Operating Rules 

proposed in the NPRM are 

inappropriate and should not be 

adopted. Commenters also stated that 

Fiscal Service’s approach to adopting 

Same Day ACH should be modified. 

Finally, commenters urged Fiscal 

Service to be more timely in addressing 

NACHA Rule changes. 

B. Summary of Comments 

Unauthorized Entry Fee 

In the 2015 amendments to the 

NACHA Operating Rules, NACHA 

added a new Section 1.11 to provide for 

the payment of an ‘‘Unauthorized Entry 

Fee.’’ Under this section, when an 

originating depository financial 

institution (‘‘ODFI’’) originates a debit 

Entry to a receiving depository financial 

institution (‘‘RDFI’’) to transfer funds 

from the account of a Receiver to an 

account of an Originator, and the Entry 

is returned on the basis that it is 

unauthorized, the ODFI agrees to pay an 

Unauthorized Entry Fee to the RDFI. In 

the NPRM, we proposed not to adopt 

the Unauthorized Entry Fee provisions 

of the NACHA Operating Rules because 

part 210 does not incorporate the 

provisions of the NACHA Operating 

Rules dealing with enforcement for 

noncompliance, and the government 

does not as a general matter subject 

itself to fines for violations of the 

NACHA Operating Rules. 

Two of the commenters opposed 

Fiscal’s Service’s proposal to exempt the 

government from paying Unauthorized 

Entry Fees, arguing that the fees are not 

fines or penalties but service fees 

intended to compensate RDFIs for costs 

incurred by the RDFI in handling 

unauthorized Entries. NACHA 

commented that unlike a fine imposed 

for noncompliance, the fee is not 

imposed as a result of an enforcement 

process by NACHA, is not paid to 

NACHA (Fines and penalties imposed 

by NACHA pursuant to its enforcement 

process are paid by the participant that 

violated the NACHA Operating Rules 

directly to NACHA. See NACHA 

Operating Rules, App. Ten, Subpart 

10.4.7.1.) and is not set at a level that 

is punitive in nature. Rather, it is based 

upon a NACHA cost study that assessed 

the burden that unauthorized entries 

place on RDFIs. According to NACHA, 

this allocation of cost to the party in the 

best position to mitigate the cost (i.e., 

through improvements to origination 

practices) provides an incentive to 

improve the quality of the network by 

reducing the number of unauthorized 

Entries that are initiated. NACHA also 

pointed out that the Unauthorized Entry 

Fee is specifically set at a level below 

actual RDFI cost in order to avoid 

creating a disincentive to ODFI 

participation in the network, and that 

nothing in the materials accompanying 

the development, balloting and 

adoption of the Unauthorized Entry Fee 

in any way characterized the fee as a 

fine or penalty. In short, NACHA asserts 

that the Unauthorized Entry Fee is no 

different from any other fees that the 

government would pay for services in 

which it participates and accordingly 

that the exclusion of the Unauthorized 

Entry Fees may amount to an improper 

taking of property without just 

compensation, in violation of the 

Takings Clause of the Fifth Amendment 

to the U.S. Constitution. 

Based on this analysis we agree with 

the conclusion that the Unauthorized 

Entry Fee is in the nature of a fee for 

services rather than a fine or penalty 

and that it is appropriate for the 

government to pay the fee when it is the 

Originator of an Unauthorized Entry. 

Accordingly, we are accepting the 

Unauthorized Entry Fee provisions for 

government ACH transactions. 

Return Rate Levels 

In 2015, the NACHA Operating Rules 

were amended to establish an inquiry 

process as a starting point to evaluate 

the origination activity of Originators 

and Third-Party Senders that reach the 

new administrative return and overall 

debit return rate levels. The 

identification of an Originator or ThirdParty Sender with a return rate that is 

higher than the respective return rate 

level may trigger a review of the 

Originator’s or Third-Party Sender’s 

ACH origination procedures. At the 

conclusion of the inquiry, NACHA may 

determine that no further action is 

required, or it may take the next step 

and recommend to the ACH Rules 

Enforcement Panel that the ODFI be 

required to reduce the Originator’s or 

Third-Party Sender’s overall or 

administrative return rate below the 

established level. 

As discussed above, Fiscal Service 

generally takes the position that it will 

not be subject to the enforcement 

provisions of the NACHA Operating 

Rules for noncompliance, including 

fines for violations of the provisions of 

the NACHA Operating Rules. Because 

the return rate level reporting provisions 

of the NACHA Rules are a basis for 

enforcement, Fiscal Service proposed 

not to adopt the return rate level 

reporting provisions. NACHA 

commented that Fiscal Service’s 

concern with reporting return rate levels 

is misplaced because Section 2.17 is not 

an enforcement rule and that the 

provisions for enforcement of Section 

2.17 are set forth at Appendix 10 to the 

NACHA Operating Rules, which is 

separately exempted from part 210. 

Because the Federal government is the 

largest single participant in the ACH 

Network, NACHA indicated that 

information concerning the Federal 

government’s return rate levels could be 

invaluable in connection with analyzing 

elevated return rates. NACHA asserted 

that this benefit far outweighs the 

minimal additional burden to the 

government of complying with the 

return rate reporting requirements and 

therefore requested that Fiscal Service 

modify the Proposed Rule to delete from 

part 210 the exclusion of Section 2.17 of 

the NACHA Operating Rules or, in the 

alternative, to limit the exclusion to 

Sections 2.17.2.2 through 2.17.2.6 of the 

amended NACHA Operating Rules. 


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Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 42599 

In light of the value of the 

government’s return rate levels for the 

ACH Network, Fiscal Service is 

accepting in the final rule the reporting 

requirement of Section 2.17 and limiting 

the exclusion to Sections 2.17.2.2 

through 2.17.2.6. 

Notification of Reversals 

In the NPRM we proposed to amend 

part 210 to address a requirement in the 

ACH Rules (NACHA Operating Rule 

2.9.1) that requires that the Originator of 

a Reversing Entry make a reasonable 

attempt to notify the Receiver of the 

Reversing Entry and the reason for the 

Reversing Entry no later than the 

settlement date of the Entry. Fiscal 

Service has had experience with this 

requirement, which is not new, and has 

found that in attempting to contact 

Receivers regarding the reversal of a 

duplicate or erroneous Entry on behalf 

of federal agencies, efforts to reach 

Receivers, typically through the RDFI, 

are often unsuccessful. Adhering to the 

notification requirement impedes the 

timeliness and efficiency of originating 

reversals, which is disadvantageous 

both for Fiscal Service and for 

Receivers. Accordingly, we proposed to 

exclude this requirement from 

incorporation in part 210. 

All of the commenters urged Fiscal 

Service to reconsider the proposed 

exclusion. Commenters noted that the 

purpose of the requirement is to ensure 

that, in the case of a credit Entry, the 

Receiver does not remove the funds 

received as a result of the Erroneous 

Entry before it can be reversed, and in 

the case of a debit Entry, the Receiver 

is notified quickly that funds were 

removed from their account in error and 

that the error will be reversed. 

Commenters pointed out that Section 

2.9.1 does not impose an absolute 

requirement that an Originator notify 

the Receiver of the Reversing Entry, but 

only requires that the Originator make a 

‘‘reasonable attempt’’ to do so. The 

commenters argued that the fact that 

Fiscal Service may find that despite its 

reasonable efforts it frequently is unable 

to reach the applicable Receiver does 

not undermine the importance and 

value of making the effort, because of 

the benefit that results in those 

instances where reasonable efforts are 

successful. 

NACHA also observed that the 

obligation to make reasonable efforts to 

notify the Receiver should have no 

effect on the timeliness or efficiency of 

originating Reversing Entries because 

notice to the Receiver is not a 

prerequisite for initiating a Reversing 

Entry. Thus, the obligation to make a 

reasonable attempt to notify the 

Receiver should not prevent the 

initiation of a Reversing Entry. 

In view of the fact that only a 

reasonable effort to notify the Receiver 

is required, and because Fiscal Service 

recognizes the value of notifying 

consumers of reversals when possible, 

Fiscal Service is not adopting the 

proposal to opt out of the reversal 

notification requirement. 

Same Day ACH 

In 2016 NACHA adopted an 

amendment that allows for same-day 

processing of ACH payments. 

Previously, the standard settlement 

period for ACH transactions was one or 

two business days after processing. The 

Same-Day ACH amendment enables 

Originators that desire same-day 

processing have the option to send 

Same Day ACH Entries to accounts at 

any RDFI. All RDFIs are required to 

receive Same-Day ACH Entries, which 

gives ODFIs and Originators the 

certainty of being able to send same day 

ACH Entries to accounts at all RDFIs in 

the ACH Network. The amendment 

includes a ‘‘Same-Day Entry fee’’ on 

each Same-Day ACH transaction to help 

mitigate RDFI costs for supporting 

Same-Day ACH. 

The amendment has a phased 

implementation period, spreading from 

2016 to 2018, with the following 

effective dates: 

• Phase 1—September 23, 2016: ACH 

credits became eligible to be processed 

during two new Same-Day ACH 

windows with submission deadlines at 

10:30 a.m. ET and 2:45 p.m. ET, with 

settlement occurring at 1:00 p.m. ET and 

5:00 p.m. ET, respectively. RDFIs are 

required to provide funds availability by 

the end of the RDFI’s processing day. 

Applicable to ACH credits only and 

non-monetary Entries, with funds 

availability due at the end of the RDFI’s 

processing day. 

• Phase 2—September 15, 2017: ACH 

debits will become eligible for same-day 

processing during the two new SameDay windows. 

• Phase 3—March 16, 2018: RDFIs 

will be required to provide funds 

availability for same day credits no later 

than 5:00 p.m. at the RDFI’s local time. 

In the NPRM we proposed to accept 

NACHA’s 2016 Same-Day amendments 

but with delayed implementation until 

August 30, 2017 of NACHA’s Phase 1 

implementation date where the 

government is receiving Same-Day 

credit Entries. The delayed 

implementation date reflects coding and 

reporting changes and testing that must 

be undertaken to enable the processing 

of incoming Same-Day credit Entries by 

Fiscal Service’s ACH credit processing 

systems. We did not propose to delay 

the government’s implementation of the 

NACHA Same-Day ACH amendment’s 

Phase 2 or Phase 3 implementation 

dates. 

NACHA commented that it would be 

inequitable for the Fiscal Service to 

reserve the right to require RDFIs to 

process Same Day Entries originated by 

the government, but refuse to process 

Same Day Entries that are received by 

the government. By doing so, the 

government would receive the benefit of 

the new rules, without having to accept 

any of the obligations with which all 

other Participating DFIs must comply. 

For this reason, NACHA recommended 

that the NPRM be revised to provide 

that the government will not originate 

Same Day Entries until it is ready to 

receive Same Day Entries, regardless of 

the effective date of a final rule on part 

210. 

Second, NACHA requested that the 

final rule provide a date certain by 

which the government will begin 

receiving Same Day Entries, stating that 

the NPRM preamble indicated only that 

the government will implement Phase 1 

for purposes of receiving Same Day 

Entries ‘‘no earlier than’’ August 30, 

2017. 

In the final rule we are providing a 

date certain of September 15, 2017 for 

implementation, and applying that date 

to both the origination and receipt of 

Same Day entries, as requested. 

Fiscal Service’s Review Process 

With respect to Fiscal Service’s 

rulemaking process to review ACH 

Rules generally, NACHA commented 

that by waiting in some cases until after 

a rules change has been implemented, 

the current process can be disruptive to 

other participants and may cause them 

to incur additional and unnecessary 

costs. NACHA urged Fiscal Service to 

establish a process to review 

amendments to the NACHA Operating 

Rules on at least an annual basis, 

arguing that because Fiscal Service 

actively participates in the NACHA 

rulemaking process, the government has 

ample opportunity to understand and 

evaluate NACHA rule proposals well in 

advance of their respective effective 

dates. 

We understand that the delay in the 

government’s review and adoption of 

ACH rule changes may inconvenience 

ACH network participants. However, 

Fiscal Service cannot address ACH rule 

changes other than through the noticeand-comment rulemaking process 

required under the Administrative 

Procedure Act. The rulemaking process 

is inherently cumbersome and timeconsuming, typically taking a year to 


asabaliauskas on DSKBBXCHB2PROD with RULES
42600 Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 

move through the process of developing 

and publishing a proposed rule, 

ultimately followed by a final rule. 

Fiscal Service will work toward 

addressing ACH rule changes on as 

timely a basis as possible in light of 

regulatory and resource limitations. 

II. Final Rule 

In the Final Rule we are adopting all 

of the amendments to part 210 that were 

proposed in the NPRM, as follows: 

A. 2014 NACHA Operating Rules & 

Guidelines Book Changes 

The 2014 edition of the NACHA 

Operating Rules & Guidelines contains 

changes related to the following 

amendments: 

• Person-to-Person Payments via 

ACH; 

• IAT Modifications; Proof of 

Authorization for Non-Consumer 

Entries; 

• Proof of Authorization for NonConsumer Entries; 

• Dishonored Returns and Contested 

Dishonored Returns Related to an 

Unintended Credit to a Receiver; 

• Reclamation Entries—Corrections 

to Rules Governing Authorizations; 

• Incomplete Transaction 

Clarification; 

• Use of Tilde as Data Segment 

Terminator; 

• Editorial Clarification—NonConsumer Receiver’s Obligation to 

Credit Originator’s Account; 

• Prenotification Entries—Reduction 

in Waiting Period for Live Entries; 

• Notification of Change (NOC)— 

Removal of Change Code C04 (Incorrect 

Individual Name/Receiving Company 

Name); and 

• ACH Operator Edit for Returns. 

We are incorporating in part 210 all 

of the foregoing amendments, which are 

summarized below, except the 

amendment relating to reclamation 

entries. 

1. Person-to-Person Payments via ACH 

This amendment standardized the use 

of the ACH Network for Person-toPerson (P2P) Entries by expanding the 

Internet-Initiated/Mobile (WEB) SEC 

Code to accommodate credit Entries 

transmitted between consumers (P2P 

transactions). A P2P Entry is defined as 

‘‘a credit Entry initiated by or on behalf 

of a holder of a Consumer Account that 

is intended for a Consumer Account of 

a Receiver.’’ The amendment also 

modified the definition of a Customer 

Initiated Entry (CIE) to ‘‘a credit Entry 

initiated by or on behalf of the holder 

of a Consumer Account to the NonConsumer Account of a Receiver.’’ 

These definitional changes ensure there 

is a clear differentiation between WEB 

credit and CIE—i.e., CIE for a bill 

payment from a consumer to a business, 

and WEB credit for a P2P transaction 

from one consumer to another or 

between consumer accounts belonging 

to the same person. In addition, this 

amendment clarified the treatment of 

NOCs related to credit WEB Entries and 

CIE Entries. 

We are accepting this amendment. 

2. IAT Modifications 

This amendment revised the NACHA 

Operating Rules to update the rules and 

formatting of the International ACH 

Transaction (IAT) in order to facilitate 

more accurate screening and 

compliance with OFAC sanctions 

policies. This modification requires a 

Gateway to identify within an Inbound 

IAT Entry (1) the ultimate foreign 

beneficiary of the funds transfer when 

the proceeds from a debit Inbound IAT 

Entry are for further credit to an 

ultimate foreign beneficiary that is a 

party other than the Originator of the 

debit IAT Entry, or (2) the foreign party 

ultimately funding a credit Inbound IAT 

Entry when that party is not the 

Originator of the credit IAT Entry. This 

amendment revised the description of 

the Payment Related Information Field 

as it relates to the IAT Remittance 

Addenda Record to establish specific 

formatting requirements for inclusion of 

the ultimate foreign beneficiary’s/ 

payer’s name, street address, city, state/ 

province, postal code, and ISO Country 

Code. The amendment also requires an 

Originator, Third-Party Sender, ODFI, or 

Gateway transmitting an IAT Entry to 

identify any country named within the 

IAT Entry by that country’s 2-digit 

alphabetic ISO Country Code, as defined 

by the International Organization for 

Standardization’s (ISO) 3166–1–alpha–2 

code list. 

We are accepting this amendment. 

3. Proof of Authorization for NonConsumer Entries 

This amendment established a 

minimum standard for proof of 

authorization for Non-Consumer Entries 

to aid in the resolution of unauthorized 

or fraudulent debits to businesses, 

particularly those where no trading 

partner relationship/agreement exists 

between the Originator and Receiver. 

This change permits an RDFI to request 

proof of a Non-Consumer Receiver’s 

authorization for a CCD, CTX, or an 

Inbound IAT Entry to a Non-Consumer 

Account. The ODFI must provide the 

required information to the RDFI at no 

charge within ten banking days of 

receiving a written request for such 

information from the RDFI. The 

amendment also requires the Originator 

to provide such proof of authorization to 

the ODFI for its use or for use by the 

RDFI. 

The amendment provides two 

methods by which an ODFI can comply 

with the RDFI’s request for proof of 

authorization. The first is to provide an 

accurate record of the authorization. 

The second is to provide the 

Originator’s contact information that 

can be used for inquiries about 

authorization of Entries. At a minimum, 

this contact information must include 

(1) the Originator’s name, and (2) the 

Originator’s phone number or email 

address for inquiries regarding 

authorization of Entries. 

We are accepting this amendment. 

4. Dishonored Returns and Contested 

Dishonored Returns Related to an 

Unintended Credit to a Receiver 

This amendment established the right 

of an ODFI to dishonor the Return of a 

debit Erroneous Entry if the Return 

Entry results in an unintended credit to 

the Receiver because (1) the Return 

Entry relates to a debit Erroneous Entry, 

(2) the ODFI has already originated a 

credit Reversing Entry to correct the 

Erroneous Entry, and (3) the ODFI has 

not received a Return of that credit 

Reversing Entry. 

Similarly, under this amendment an 

ODFI may dishonor the Return of a 

debit Reversing Entry if the Return 

Entry results in an unintended credit to 

the Receiver because (1) the Return 

Entry relates to a debit Reversing Entry 

that was intended to correct a credit 

Erroneous Entry, and (2) the ODFI has 

not received a Return of that credit 

Erroneous Entry. The amendment 

requires an ODFI dishonoring a debit 

Return Entry under either of these 

conditions to warrant that it originated 

a Reversal in an effort to correct the 

original erroneous transaction and 

therefore is dishonoring the Return of 

the debit Erroneous Entry or the debit 

Reversing Entry, either of which causes 

an unintended credit to the Receiver. 

The amendment also establishes the 

right of an RDFI to contest this type of 

dishonored Return if either of the 

following conditions exists: (1) The 

RDFI returned both the Erroneous Entry 

and the related Reversal; or (2) the RDFI 

is unable to recover the funds from the 

Receiver. 

We are accepting this amendment. 

5. Reclamation Entries—Corrections to 

Rules Governing Authorization 

This amendment made several 

corrections to the rules governing the 

authorization of Reclamation Entries. 

These changes address technical and 


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drafting discrepancies between 

Reversing Entries and Reclamation 

Entries in the NACHA Operating Rules 

and make the rules related to 

Reclamation Entries consistent with 

those for Reversing Entries to the extent 

possible. 

We are not incorporating this 

amendment in part 210. Part 210 

generally excludes all NACHA 

Operating Rules relating to the 

reclamation of benefit payments because 

part 210 contains specific provisions on 

the reclamation of Federal benefit 

payments. No revision to the text of part 

210 is required to exclude this 

amendment from part 210 because the 

amendment modifies Section 2.10 of the 

NACHA Operating Rules, which is 

already inapplicable to the government 

under § 210.2(d)(2). 

6. Incomplete Transaction Clarifications 

The Incomplete Transaction 

Clarifications amendment recognizes 

certain ARC, BOC, and POP Entries to 

Non-Consumer Accounts as eligible for 

return under the Incomplete 

Transaction Rule. This change 

streamlines RDFIs’ processing of ARC, 

BOC, and POP returns and improves 

their ability to comply with the NACHA 

Operating Rules by eliminating different 

processing requirements for 

unauthorized/improper consumer and 

non-consumer ARC, BOC, and POP 

Entries, which share the same Standard 

Entry Class Code. The change restores 

the RDFI’s ability to rely solely on the 

Standard Entry Class Code when 

determining handling requirements for 

specific types of Entries. This 

amendment also added specific 

references to ‘‘consumer’’ Receivers, 

where appropriate, to add clarity 

regarding the scope of the Incomplete 

Transaction Rules. 

This amendment modifies Article 

Three, Subsection 3.12.3 (Incomplete 

Transaction) to add the word 

‘‘consumer’’ to clarify that the Receiver 

of an Incomplete Transaction is 

generally the owner of a consumer 

account, with one specific exception. 

The amendment also adds language to 

this subsection to state that an ARC, 

BOC, or POP Entry may also be 

considered an Incomplete Transaction 

regardless of whether the account that is 

debited is a Consumer Account or a 

Non-Consumer Account. The 

amendment made corresponding 

changes to the definition of an 

Incomplete Transaction in Article Eight, 

Section 8.50 and clarified that a Written 

Statement of Unauthorized Debit must 

be accepted for any Incomplete 

Transaction involving any ARC, BOC, or 

POP Entry. 

We are accepting this amendment. 

7. Use of Tilde as Data Segment 

Terminator 

This amendment corrected two IAT 

field descriptions, ‘‘Originator City and 

State/Province’’ and ‘‘Receiver City and 

State/Province,’’ to clarify that the tilde 

(‘‘∼’’) is a valid data segment terminator. 

We are accepting this amendment. 

8. Editorial Clarification—NonConsumer Receiver’s Obligation to 

Credit Originator’s Account 

This amendment revised the text and 

title of Article Three, Subsection 3.3.1.3 

(Non-Consumer Receiver Must Credit 

Originator’s Account) to make the 

section’s intent clearer and easier to 

understand for ACH Network 

participants. This change was editorial 

in nature only. 

We are accepting this amendment. 

9. Prenotification Entries—Reduction in 

Waiting Period for Live Entries 

This amendment reduced the six 

banking-day waiting period between 

initiation of a Prenotification and ‘‘live’’ 

Entries for Originators choosing to 

originate Prenotes. This amendment 

also modified the NACHA Operating 

Rules related to Notifications of Change 

to clarify the Originator’s obligations 

with respect to an NOC received in 

response to a Prenote. This change 

permits an Originator that has 

originated a Prenotification Entry to a 

Receiver’s account to initiate 

subsequent Entries to the Receiver’s 

account as soon as the third Banking 

Day following the Settlement Date of the 

Prenotification Entry, provided that the 

ODFI has not received a return or NOC 

related to the Prenotification. 

We are accepting this amendment. 

10. Notification of Change—Removal of 

Change Code C04 (Incorrect Individual 

Name/Receiving Company Name) 

This amendment removed the 

Notification of Change Code—C04 

(Incorrect Individual Name/Receiving 

Company Name) from the NACHA 

Operating Rules. Change Code C04 

(Incorrect Individual Name/Receiving 

Company Name) had been used by 

RDFIs to request a correction to the 

name of the Receiver indicated in an 

ACH Entry. As with any Notification of 

Change, the RDFI that transmitted an 

NOC with this change code warranted 

the accuracy of the corrected data (in 

this case, the Receiver’s name). The 

Originator was then obligated to make 

the requested change within six banking 

days or prior to initiating a subsequent 

Entry, whichever is later. 

In certain scenarios, the use of C04 

created compliance and liability 

challenges for the Originator, ODFI, and 

RDFI. Generally speaking, an ACH 

transaction involves a mutual customer 

of both the Originator and the RDFI. In 

the event that the Receiver’s name on a 

debit Entry was different from the name 

on the account, most RDFIs would 

either post the Entry based solely on the 

account number or return the 

transaction using Return Reason Code 

R03 (No Account/Unable to Locate 

Account). In some cases, RDFIs 

transmitted NOCs using Change Code 

C04 to instruct the Originator to change 

the Receiver’s name on future Entries. 

The use of C04 presented additional risk 

to the RDFI and the ODFI and/or the 

Originator because the RDFI was 

warranting that the name change is 

accurate, but it did not always reflect 

the party with whom the Originator has 

the relationship. As a result, Originators 

were typically unable or unwilling to 

make the changes in accordance with 

their obligations under the NACHA 

Operating Rules. An Originator 

continuing to debit its customer without 

making the change warranted by the 

RDFI did so in violation of the current 

Rules, creating challenges and conflict 

for all parties. Eliminating Change Code 

C04 (Incorrect Individual Name/ 

Receiving Company Name) removed the 

challenges and potential rules violations 

that Originators faced when they receive 

a request for a name change that they 

were unable to make. Under the 

amendment, an Originator can rely on 

its own contracts and records to 

properly identify the name of the 

Receiver being credited or debited 

without being in violation of the 

NACHA Operating Rules because of the 

failure to respond to an NOC. 

Eliminating Change Code C04 

(Incorrect Individual Name/Receiving 

Company Name) lessens the risk to the 

RDFI as it warrants that information 

contained in an NOC is correct. A 

change as significant as a name change 

should be accomplished through 

communication of the Receiver with the 

Originator so that the authorization held 

by the Originator is accurate. The RDFI 

that identifies a name mismatch can 

post the Entry based solely on the 

account number, return the Entry as 

R03, or choose to assist its Receiver by 

communicating directly with the ODFI/ 

Originator. Any of these options should 

cause the Originator and the Receiver to 

communicate relating to needed 

changes while relieving the RDFI of the 

warranty that the information is correct. 

We are accepting this amendment. 


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42602 Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 

1The 2015 Rules & Guidelines book also included 

two amendments addressed in the 2014 Rules & 

Guidelines book that had effective dates in 2015: (1) 

Dishonored Returns and Contested Dishonored 

Returns Related to an Unintended Credit to a 

Receiver and (2) Notification of Change—Removal 

of Change Code C04. Because those amendments 

are addressed in Section A above, we are not 

including them in Section B. 

11. ACH Operator Edit for Returns 

This amendment incorporated an 

additional ACH Operator edit within the 

listing of ACH Operator file/batch reject 

edit criteria specified within Appendix 

Two of the NACHA Operating Rules. 

Specifically, this edit requires ACH 

Operators to reject any batch of Return 

Entries in which RDFI returns and ACH 

Operator returns are commingled. By 

definition, different parties are 

responsible for generating each type of 

return, and each must be separately 

identified within the Company/Batch 

Header Record as the sender of the 

batch. This ACH Operator edit codifies 

this fact within the NACHA Operating 

Rules and ensures consistent processing 

of return batches by all ACH Operators. 

We are accepting this amendment. 

B. 2015 NACHA Operating Rules & 

Guidelines Book Changes 

The 2015 edition of the NACHA 

Operating Rules contains changes 

related to the following amendments: 1

• ACH Network Risk and 

Enforcement; 

• Improving ACH Network Quality— 

Unauthorized Entry Fee; 

• Clarification on Company 

Identification for P2P WEB Credit 

Entries; 

• Point-of-Sale Entries—Clarification 

of General Rule; 

• Return Fee Entry Formatting 

Requirements; 

• Entry Detail Record for Returns— 

Clarification Regarding POP Entries; 

• Clarification of RDFI’s Obligation to 

Recredit Receiver; 

• Clarification on Prenotification 

Entries and Addenda Records; and 

• ACH Operator Edit for Returns. 

We are incorporating in part 210 all 

of the foregoing amendments, which are 

summarized below, other than some 

provisions of the amendment relating to 

ACH Network Risk and Enforcement. 

1. ACH Network Risk and Enforcement 

This amendment expanded existing 

rules regarding ODFIs’ and Third-Party 

Senders’ requirements for risk 

management and origination practices, 

such as return rate levels. It also 

expanded NACHA’s authority to initiate 

enforcement proceedings for a potential 

violation of the NACHA Operating 

Rules related to unauthorized Entries. 

Return Rate Levels 

The amendment reduced the 

threshold for unauthorized debit Entries 

(Return Reason Codes R05, R07, R10, 

R29, and R51) from 1.0 percent to 0.5 

percent and also established two new 

return rate levels for other types of 

returns. First, a return rate level of 3.0 

percent will apply to debit entries 

returned due to administrative or 

account data errors (Return Reason 

Codes R02—Account Closed; R03—No 

Account/Unable to Locate Account; and 

R04—Invalid Account Number 

Structure). Second, a return rate level of 

15.0 percent will apply to all debit 

entries (excluding RCK entries) that are 

returned for any reason. 

The amendment also established an 

inquiry process, which is separate and 

distinct from an enforcement 

proceeding, as a starting point to 

evaluate the origination activity of 

Originators and Third-Party Senders 

that reach the new administrative return 

and overall debit return rate levels. The 

identification of an Originator or ThirdParty Sender with a return rate that is 

higher than the respective return rate 

level may trigger a review of the 

Originator’s or Third-Party Sender’s 

ACH origination procedures. At the 

conclusion of the inquiry, NACHA may 

determine that no further action is 

required, or it may take the next step 

and recommend to the ACH Rules 

Enforcement Panel that the ODFI be 

required to reduce the Originator’s or 

Third-Party Sender’s overall or 

administrative return rate below the 

established level. 

In this new role, the ACH Rules 

Enforcement Panel will be the final 

authority in deciding, after the 

completion of the inquiry, whether the 

ODFI should be required to reduce the 

Originator’s or Third-Party Sender’s 

overall or administrative return rate. 

After reviewing NACHA’s 

recommendation, the Panel can decide 

either to take no action, at which point 

the case would be closed, or to have 

NACHA send a written directive to the 

ODFI, which would require the 

reduction of the Originator’s or ThirdParty Sender’s administrative or overall 

return rate. 

We are incorporating in part 210 the 

provisions of the amendment relating to 

return rate level reporting at section 

2.17. We are not accepting the 

provisions for enforcement of Section 

2.17 that are set forth at Appendix 10 to 

the NACHA Operating Rules, which is 

separately exempted from part 210. The 

exclusion from Section 2.17 in the 

regulation text is limited to Sections 

2.17.2.2 through 2.17.2.6. 

Reinitiation of Entries 

This amendment explicitly prohibited 

the reinitiation of Entries outside of the 

express limited circumstances under 

which they are permitted under the 

NACHA Operating Rules. The 

amendment also added a specific 

prohibition against reinitiating a 

transaction that was returned as 

unauthorized. The amendment further 

included an anti-evasion provision, 

specifying that any other Entry that 

NACHA reasonably believes represents 

an attempted evasion of the defined 

limitations will be treated as an 

improper reinitiation. The ACH Rules 

Enforcement Panel will have final 

authority in deciding whether a specific 

case involves an attempted evasion of 

the limitations on reinitiation. 

To avoid unintended consequences 

from these clarifications, the 

amendment included two categories of 

Entries that will not be considered 

reinitiations. First, the amendment 

clarified that a debit Entry in a series of 

preauthorized recurring debit Entries 

will not be treated as a reinitiated Entry, 

even if the subsequent debit Entry 

follows a returned debit Entry, as long 

as the subsequent Entry is not 

contingent upon whether an earlier 

debit Entry in the series has been 

returned. Second, the amendment 

expressly stated that a debit Entry will 

not be considered a ‘‘reinitiation’’ if the 

Originator obtains a new authorization 

for the debit Entry after the receipt of 

the Return. 

The amendment requires a reinitiated 

Entry to contain identical content in the 

following fields: Company Name, 

Company ID, and Amount. Further, the 

amendment permits modification to 

other fields only to the extent necessary 

to correct an error or facilitate 

processing of an Entry. This change 

allows reinitiations to correct 

administrative errors, but prohibits 

reinitiation of Entries that may be 

attempts to evade the limitation on the 

reinitiation of returned Entries by 

varying the content of the Entry. Finally, 

the amendment addressed certain 

technical issues associated with the 

reinitiation requirements. 

We are accepting the reinitiation 

provisions of the amendment. 

Third-Party Sender Issues 

The amendment added a direct 

obligation on Third-Party Senders to 

monitor, assess and enforce limitations 

on their customer’s origination and 

return activities in the same manner the 

NACHA Operating Rules require of 

ODFIs. Prior to this amendment, the 

NACHA Operating Rules required 


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ODFIs to establish, implement, 

periodically review and enforce 

exposure limits for their Originators and 

Third-Party Senders. The ODFI was 

required to monitor each Originator’s 

and Third-Party Sender’s origination 

and return activity across multiple 

Settlement Dates, enforce restrictions on 

the types of Entries that may be 

originated and enforce the exposure 

limit. If an ODFI enters into a 

relationship with a Third-Party Sender 

that processes Entries such that the 

ODFI itself cannot or does not perform 

these monitoring and enforcement tasks 

with respect to the Originators serviced 

by the Third-Party Sender, the ThirdParty Sender must do so. The 

amendment added a specific statement 

of this obligation. 

We are accepting the Third-Party 

Sender provisions of the amendment. 

NACHA’s Enforcement Authority 

The amendment provided NACHA 

with the express authority to bring an 

enforcement action based on the 

origination of unauthorized entries. To 

ensure the judicious use of the 

expanded authority, the amendment 

requires the ACH Rules Enforcement 

Panel to validate the materiality of this 

type of enforcement case before NACHA 

can initiate any such proceeding. In 

addition, the amendment encourages 

RDFIs to voluntarily provide to NACHA 

information, such as return data, that 

may be indicative of a potential rules 

violation for improper authorization 

practices by other ACH Network 

participants, even if the RDFI is not 

interested in itself initiating a rules 

enforcement proceeding. Such early 

sharing of information regarding 

unusual return rates or unauthorized 

transactions can help eliminate 

improper activities more quickly. 

We are not incorporating in part 210 

the provisions of the amendment that 

relate to NACHA’s enforcement 

authority. Part 210 excludes the 

government from the risk investigation 

and enforcement provisions of the 

NACHA Operating Rules. Fiscal Service 

tracks unauthorized return rates for 

Federal agencies and will use the new 

unauthorized return limits and 

reinitiation limitations in overseeing 

agency ACH origination activity. No 

change to the text of part 210 is required 

to exclude these provisions because part 

210 already excludes Appendix Ten of 

the NACHA Operating Rules, which 

governs rules enforcement. 

2. Improving ACH Network Quality— 

Unauthorized Entry Fee 

This amendment requires an ODFI to 

pay a fee to the RDFI for each ACH debit 

that is returned as unauthorized (Return 

Reason Codes R05, R07, R10, R29 and 

R51). RDFIs will be compensated for a 

portion of the costs they bear for 

handling unauthorized transactions, and 

will experience reduced costs due to a 

reduction in unauthorized transactions 

over time. The amendment provides 

that ODFIs and RDFIs authorize debits 

and credits to their accounts for the 

collection and distribution of the fees. 

IAT transactions are not covered by the 

fee, but could be included in the future. 

The amendment defines a methodology 

by which NACHA staff will set and 

review every three years the amount of 

the Unauthorized Entry Fee. In setting 

the amount of the fee, NACHA staff will 

apply several stated principles, 

including the review of RDFI cost 

surveys. Based on the results of the 

current data collection on RDFIs’ costs 

for handling unauthorized transactions, 

NACHA has estimated that the fee 

amount will be in the range of $3.50– 

$5.50 per return. 

We are accepting the Unauthorized 

Entry Fee provisions of the amendment. 

3. Clarification of Company 

Identification for Person-to-Person WEB 

Credit Entries 

This amendment added language to 

the Company Identification field 

description to clarify content 

requirements for Person-to-Person (P2P) 

WEB credit Entries. 

For P2P WEB credit Entries, the 

Company/Batch Header Record 

identifies the P2P service provider (i.e., 

the consumer Originator’s own financial 

institution or a third-party service 

provider) rather than the consumer 

Originator. Prior to the amendment, the 

NACHA Operating Rules specifically 

defined service provider content 

requirements for the Company Name 

field, but omitted the same clarification 

for the Company Identification, which is 

a related field. The purpose of the 

amendment was to eliminate any 

potential confusion over proper 

formatting of this field. 

We are accepting this amendment. 

4. Point-of-Sale (POS) Entries— 

Clarification of General Rule 

This amendment re-aligned the 

general rule for POS Entries with the 

definition of POS Entries in Article 

Eight. A POS Entry is generally 

considered to be a debit Entry initiated 

at an electronic terminal by a consumer 

to pay an obligation incurred in a pointof-sale transaction. However, a POS 

Entry can also be an adjusting or other 

credit Entry related to the debit Entry, 

transfer of funds, or obligation (for 

example, a credit to refund a previous 

point-of-sale transaction). Prior to the 

amendment, the definition of POS 

within the NACHA Operating Rules 

recognized these Entries as both debits 

and credits, but the general rule for POS 

identified POS Entries only as debits. 

This amendment corrected the 

discrepancy. 

We are accepting this amendment. 

5. Return Fee Entry Formatting 

Requirements 

This amendment modified the 

description of the Individual Name 

Field in a PPD Return Fee Entry related 

to a returned ARC, BOC, or POP Entry 

to require that it contain the same 

information identified within the 

original ARC, BOC, or POP Entry. The 

Individual Name Field is optional for 

ARC, BOC, and POP; therefore, this field 

(1) may include the Receiver’s name, (2) 

may include a reference number, 

identification number, or code that the 

merchant needs to identify the 

particular transaction or customer, or (3) 

may be blank. 

The name of the Receiver must be 

included in all PPD Entries. With ARC, 

BOC, or POP Entries, where a reading 

device must be used to capture the 

Receiver’s routing number, account 

number, and check serial number, it is 

difficult for the Originator to capture the 

Receiver’s name in an automated 

fashion. For this reason, the NACHA 

Operating Rules do not require 

Originators to include the Receiver’s 

name in the ARC, BOC, or POP Entry 

Detail Record. Originators are permitted 

the choice of including either the 

Receiver’s name, or a reference number, 

identification number, or code 

necessary to identify the transaction, or 

the field may be left blank. Because 

information contained within the 

returned ARC, BOC, or POP Entry is 

typically used to create a related Return 

Fee Entry, the Receiver’s name is likely 

not readily available to the Originator 

for use in the Return Fee Entry, 

especially when the Receiver’s 

authorization for the Return Fee Entry 

was obtained by notice. This 

amendment established consistent 

formatting requirements with respect to 

the Receiver’s name for check 

conversion entries and related return 

fees. 

We are accepting this amendment. 

6. Entry Detail Record for Returns— 

Clarification Regarding POP Entries 

This amendment added a footnote to 

the Entry Detail Record for Return 

Entries to clarify the specific use of 

positions 40–54 with respect to the 

return of a POP Entry. On a forward 

POP Entry, positions 40–54 represent 


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42604 Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 

2The 2016 Rule Book also codified changes 

related to the rule NACHA adopted in 2015 on 

Improving ACH Network Quality (Unauthorized 

Entry Fee), which is addressed above in Section B— 

2015 NACHA Operating Rule Book Changes. 

three separate fields to convey (1) the 

check serial number (positions 40–48); 

(2) the truncated name or abbreviation 

of the city or town in which the 

electronic terminal is located (positions 

49–52); and (3) the state in which the 

electronic terminal is located (positions 

53–54). However, these three fields are 

not explicitly identified in the Entry 

Detail Record for Return Entries, which 

caused some confusion among users as 

to how to map such information from 

the original forward Entry into the 

Return Entry format. 

We are accepting this amendment. 

7. Clarification of RDFI’s Obligation To 

Recredit Receiver 

This amendment clarified that an 

RDFI’s obligation to recredit a Receiver 

for an unauthorized or improper debit 

Entry is generally limited to Consumer 

Accounts, with certain exceptions for 

check conversion and international 

transactions. Prior to the NACHA 

Operating Rules simplification initiative 

in 2010, the rules governing a Receiver’s 

right to recredit for unauthorized debit 

entries clearly limited this provision to 

debit Entries affecting Consumer 

Accounts, except as expressly provided 

for ARC, BOC, IAT, and POP Entries 

(which can affect both consumer and 

business accounts). However, when 

rules language was combined and 

revised during the simplification 

process into a general discussion on 

recredit, some of this clarity was lost, 

resulting in language that was somewhat 

ambiguous and the cause of confusion 

for some ACH participants. This change 

more clearly defines the intent of the 

rule requirement for an RDFI to recredit 

a Receiver. 

We are accepting this amendment. 

8. Clarification of Prenotification Entries 

and Addenda Records 

This amendment revised the NACHA 

Operating Rules to clarify that, with the 

exception of IAT Entries, a 

prenotification Entry is not required to 

include addenda records that are 

associated with a subsequent live Entry. 

Generally speaking, the format of a 

Prenotification Entry must be the same 

as the format of a live dollar Entry. 

There are, however, some differences 

between Prenotes and live Entries to 

which the Prenotes relate: 

• The dollar amount of a 

Prenotification Entry must be zero; 

• a Prenotification Entry is identified 

by a unique transaction code; and 

• addenda records associated with a 

live Entry are not required with 

Prenotes (unless the Prenote relates to 

an IAT Entry). 

While the first two formatting criteria 

above for Prenotification Entries are 

clearly defined within the technical 

standards and are commonly 

understood by industry participants, the 

issue of whether Prenotification Entries 

require addenda records was somewhat 

ambiguous. The amendment eliminated 

that ambiguity. 

We are accepting this amendment. 

9. ACH Operator Edit for Returns 

This amendment incorporated an 

additional ACH Operator edit within the 

listing of ACH Operator file/batch reject 

edit criteria specified within Appendix 

Two of the NACHA Operating Rules. 

Specifically, this edit requires ACH 

Operators to reject any batch of Return 

Entries in which RDFI returns and ACH 

Operator returns are commingled. By 

definition, different parties are 

responsible for generating each type of 

return, and each must be separately 

identified within the Company/Batch 

Header Record as the sender of the 

batch. This ACH Operator edit codifies 

this fact and ensures consistent 

processing of return batches by all ACH 

Operators. 

We are accepting this amendment. 

C. 2016 NACHA Operating Rules & 

Guidelines Book Changes 

The 2016 edition of the NACHA 

Operating Rules & Guidelines contains 

changes related to the following 

amendments: 2

• Same-Day ACH: Moving Payments 

Faster; 

• Disclosure Requirements for POS 

Entries; 

• Recrediting Receiver—Removal of 

Fifteen Calendar Day Notification Time 

Frame; 

• Clarification of RDFI Warranties for 

Notifications of Change; and 

• Minor Rules Topics. 

We are incorporating in part 210 all 

of the foregoing amendments except that 

we are delaying our implementation of 

Same-Day ACH as discussed below. 

1. Same-Day ACH: Moving Payments 

Faster 

This amendment allows for same-day 

processing of ACH payments. 

Previously, the standard settlement 

period for ACH transactions is one or 

two business days after processing. The 

Same-Day ACH amendment enables the 

option for same-day processing and 

settlement of ACH payments through 

new ACH Network functionality 

without affecting existing ACH 

schedules and capabilities. Originators 

that desire same-day processing have 

the option to send Same Day ACH 

Entries to accounts at any RDFI. All 

RDFIs are required to receive Same-Day 

ACH Entries, which gives ODFIs and 

Originators the certainty of being able to 

send same day ACH Entries to accounts 

at all RDFIs in the ACH Network. The 

amendment includes a ‘‘Same-Day Entry 

fee’’ on each Same-Day ACH transaction 

to help mitigate RDFI costs for 

supporting Same-Day ACH. 

The amendment has a phased 

implementation period, spreading from 

2016 to 2018, with the following 

effective dates: 

• Phase 1—September 23, 2016: ACH 

credits became eligible to be processed 

during two new Same-Day ACH 

windows with submission deadlines at 

10:30 a.m. ET and 2:45 p.m. ET, with 

settlement occurring at 1:00 p.m. ET and 

5:00 p.m. ET, respectively. RDFIs are 

required to provide funds availability by 

the end of the RDFI’s processing day. 

Applicable to ACH credits only and 

non-monetary Entries, with funds 

availability due at the end of the RDFI’s 

processing day. 

• Phase 2—September 15, 2017: ACH 

debits will become eligible for same-day 

processing during the two new SameDay windows. 

• Phase 3—March 16, 2018: RDFIs 

will be required to provide funds 

availability for same day credits no later 

than 5:00 p.m. at the RDFI’s local time. 

The existing next-day ACH settlement 

window of 8:30 a.m. ET will not change. 

With the addition of the new Same-Day 

ACH processing windows, the ACH 

Network will provide three 

opportunities for ACH settlement each 

day. 

Payment Eligibility 

Virtually all types of ACH payments 

will be eligible for same-day processing 

by the end of the implementation 

period. The only ACH transactions 

ineligible for same-day processing will 

be IAT transactions and individual 

transactions over $25,000. In addition to 

credits and debits, the ACH Network 

supports a number of transaction types 

that do not transfer a dollar value. Nonmonetary transactions include 

Prenotifications; Notifications of Change 

(NOCs); Zero Dollar Entries that convey 

remittance information using CCDs and 

CTXs; and Death Notification Entries. 

With the exception of Prenotifications 

for future debit Entries, these nonmonetary transactions are eligible for 

same-day processing from the outset. 

Automated Enrollment Entries (ENRs) 

do not use Effective Entry Dates. Since 


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there will not be a way to distinguish 

same day ENR Entries from next-day 

Entries, ENRs will not be processed as 

same day transactions. 

Identification of Same-Day Transactions 

via the Effective Entry Date 

Same-Day ACH transactions are 

identified by the ODFI and its 

Originator by using the current day’s 

date in the Effective Entry Date field of 

the Company/Batch Header Record. 

(Note: The NACHA Operating Rules 

define the Effective Entry Date as ‘‘the 

date specified by the Originator on 

which it intends a batch of Entries to be 

settled.’’) In addition, transactions 

intended for same-day processing that 

carry a current day Effective Entry Date 

must meet an ACH Operator’s 

submission deadline for same-day 

processing. For example, transactions 

originated on Tuesday, October 10, 2017 

that are intended for same-day 

processing must have an Effective Entry 

Date of ‘‘171010’’ in the Company/Batch 

Header Record and be submitted to an 

ACH Operator no later than the 2:45 

p.m. ET deadline to ensure same-day 

settlement. Any Entry carrying the 

current day’s date in the Effective Entry 

Date field that is submitted prior to an 

ACH Operator’s same-day processing 

submission deadline will be handled as 

a Same-Day ACH transaction and 

assessed the Same-Day Entry fee. 

Stale or Invalid Effective Entry Dates 

ACH transactions submitted to an 

ACH Operator with stale or invalid 

Effective Entry Dates will be settled at 

the earliest opportunity, which could be 

the same day. If the transactions are 

submitted prior to the close of the 

second same-day processing window at 

2:45 p.m. ET, the Entries will be settled 

the same day and the Same-Day Entry 

fee will apply. If the transactions are 

submitted to the ACH Operator after 

2:45 p.m. ET, the Entries will be settled 

the next day and the Same-Day Entry fee 

will not apply. 

Return Entry Processing 

The amendment allows same-day 

processing of return Entries at the 

discretion of the RDFI, whether or not 

the forward Entry was a Same-Day ACH 

transaction. Any return Entry is eligible 

for settlement on a same-day basis; the 

$25,000 per transaction limit and IAT 

restriction will not apply. Because 

returns are initiated and flow from RDFI 

to ODFI, return Entries processed on a 

same-day basis will not be subject to the 

Same-Day Entry fee. 

RDFIs are not required to process 

returns on the same day that the forward 

Entry is received. The return Entry must 

be processed in such time that it is 

made available to the ODFI no later than 

the opening of business on the second 

banking day following the Settlement 

Date of the original Entry. RDFIs have 

the option of using any of the available 

settlement windows for returns, as long 

as the existing return time frame is met. 

Same-Day Entry Fee 

In order to ensure universal reach to 

any account at any RDFI, all RDFIs must 

implement Same-Day ACH. To assist 

RDFIs in recovering costs associated 

with enabling same-day transactions, 

the amendment includes a fee paid from 

the ODFI to the RDFI for each Same-Day 

ACH Entry. The fee provides a 

mechanism to help RDFIs mitigate 

investment and operating expenses and 

provide a fair return on their required 

investments. The initial Same-Day Entry 

fee is set at 5.2 cents per Same Day 

Entry. The fee is assessed and collected 

by the ACH Operators through their 

established monthly billing. The 

amendment includes a methodology to 

measure the effectiveness of the SameDay Entry fee at five, eight and ten full 

years after implementation. After each 

review, the Same-Day Entry fee could be 

maintained or lowered, but not 

increased. 

We are accepting the Same-Day 

amendment but with delayed 

implementation of NACHA’s Phase 1 

implementation date until September 

15, 2017. Fiscal Service plans to enable 

agencies to originate Same-Day Entries 

in appropriate situations and is working 

with agencies to develop and publish 

guidance outlining the criteria and 

procedures to be used for originating 

Same-Day Entries. Fiscal Service 

believes that Same-Day credit Entries 

may be useful to agencies that need to 

make certain emergency or timesensitive payments, including payments 

not exceeding $25,000 that are currently 

made by Fedwire. We believe that the 

majority of ACH credit Entries 

originated by the government are not 

suitable for same-day processing in light 

of the fee payable for Same-Day Entries, 

and therefore we anticipate that the 

government’s origination of Same-Day 

Entries will be limited. We plan to 

publish guidance for agencies that will 

set forth both the criteria and the 

procedure for certifying a Same-Day 

ACH transaction. That guidance will 

indicate whether agencies should 

indicate their intent for same-day 

processing and settlement solely by 

utilizing the Effective Entry Date, or 

may also utilize the optional 

standardized content in the Company 

Descriptive Date field as a same-day 

transaction indicator. 

The delayed implementation date 

reflects coding and reporting changes 

and testing that are underway to enable 

the processing of incoming Same-Day 

credit Entries by Fiscal Service’s ACH 

credit processing systems. The U.S. 

government will not originate Same-Day 

entries prior to September 15, 2017 and 

any ACH Entry received by the 

government prior to that date will not be 

eligible for same-day settlement and 

will continue to settle on a future date 

(typically the next banking day) 

regardless of submission date and time. 

We are not delaying the government’s 

implementation of the NACHA SameDay ACH amendment’s Phase 2 or Phase 

3 implementation dates. 

The 2016 NACHA Operating Rules 

incorporate in the rule text only those 

provisions of the Same-Day ACH 

amendment that have effective dates in 

2016. However, in order to provide 

advance notice of the impact of the 

Phase 2 and 3 implementations, the 

2016 Rules Book sets forth the sections 

of the NACHA Operating Rules affected 

by the Same-Day ACH amendment as 

they will read upon implementation in 

2017 and 2018. 

We are incorporating in part 210 the 

future changes relating to the Same-Day 

ACH amendment’s Phase 2 and 3 

implementation provisions scheduled 

for 2017 and 2018 as they appear in the 

2016 NACHA Operating Rules & 

Guidelines book. 

2. Disclosure Requirements for POS 

Entries 

This amendment established an 

Originator/Third-Party Service Provider 

obligation to provide consumer 

Receivers with certain disclosures when 

providing those consumers with cards 

used to initiate ACH Point of Sale (POS) 

Entries. The amendment requires 

Originators or Third-Party Service 

Providers that issue ACH cards (or their 

virtual, non-card equivalent, 

collectively referred to as ‘‘ACH Cards’’) 

to make the following disclosures in 

written or electronic, retainable form to 

a consumer prior to activation: 

• The ACH Card is not issued by the 

consumer’s Depository Financial 

Institution. 

• POS Entries made with the ACH 

Card that exceed the balance in the 

consumer’s financial institution account 

may result in overdrafts and associated 

fees, regardless of whether the consumer 

has opted to allow overdrafts with 

respect to debit cards issued by the 

Depository Financial Institution that 

holds the consumer’s account. 

• Benefits and protections for 

transactions made using the ACH Card 

may vary from those available through 


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debit cards issued by the consumer’s 

Depository Financial Institution. 

The amendment included sample 

language for Originators or Third-Party 

Service Providers to consider in 

designing an ACH Card disclosure for 

purposes of compliance with the 

NACHA Operating Rules. This 

amendment will not affect Agencies 

because they do not issue ACH Cards. 

We are accepting this amendment. 

3. Recrediting Receiver—Removal of 

Fifteen Calendar Day Notification Time 

Frame 

This amendment removed the fifteen 

calendar day notification period 

associated with an RDFI’s obligation to 

promptly recredit a consumer account 

for an unauthorized debit Entry, and 

aligned the RDFI’s recredit obligation 

with its ability to transmit an Extended 

Return Entry. Because of the extended 

return window for unauthorized 

consumer debits under the NACHA 

Operating Rules, prior to the 

amendment many RDFIs found the 

reference to the fifteen calendar day 

timing to be a source of confusion and 

misunderstanding. The amendment 

revised the NACHA Operating Rules to 

align the provision for prompt recredit 

with the RDFI’s receipt of a Written 

Statement of Unauthorized Debit from 

the consumer and the RDFI’s ability to 

transmit an Extended Return Entry (i.e., 

transmitted to the ACH Operator so that 

the Extended Return Entry is made 

available to the ODFI no later than 

opening of business on the banking day 

following the sixtieth calendar day 

following the settlement date of the 

original Entry). This change applies to 

unauthorized/improper entries bearing 

Standard Entry Class Codes (SECs) that 

are classified as consumer entries, as 

well as those that can be both consumer 

and non-consumer entries (ARC, BOC, 

POP, and IAT debit entries). 

We are accepting this amendment. 

4. Clarification of RDFI Warranties for 

Notifications of Change 

This amendment modified the 

NACHA Operating Rules with respect to 

Notifications of Change (NOCs) to 

clarify aspects of: (1) The RDFI’s 

warranties made with respect to its 

transmission of a Notification of Change 

or Corrected Notification of Change; and 

(2) the ODFI’s warranties made with 

respect to usage of the corrected data 

within subsequent transactions. 

Specifically, the amendment clarified 

that the RDFI’s warranty for information 

contained in a Notification of Change or 

Corrected Notification of Change is 

applicable only to the corrected 

information supplied by the RDFI. 

This modification removed from the 

RDFI’s warranty on NOCs the specific 

statement that the Receiver has 

authorized the change identified in the 

NOC, if the Receiver’s authorization is 

required. This subsection has been 

misinterpreted to mean that it 

supersedes the ODFI’s warranty that a 

subsequent Entry is properly authorized 

by the Receiver. The RDFI does not 

warrant that the Entry itself has been 

properly authorized by the Receiver, but 

only that the data supplied in the 

Corrected Data field is accurate. The 

warranty that any Entry (including a 

subsequent Entry that uses corrected 

data from an NOC) is properly 

authorized still lies with the ODFI per 

Article Two, Subsection 2.4.1.1 (The 

Entry is Authorized by the Originator 

and Receiver). 

We are accepting this amendment. 

5. Minor Rules Topics 

These amendments changed four 

areas of the NACHA Operating Rules to 

address minor topics. Minor changes to 

the NACHA Operating Rules have littleto-no impact on ACH participants and 

no significant economic impact. 

i. Clarification of ODFI Periodic 

Statement Requirements for CIE and 

WEB Credits 

This amendment made minor, 

editorial clarifications to the language 

within Article Two, Subsections 2.5.4.2 

(ODFI to Satisfy Periodic Statement 

Requirement) and 2.5.17.6 (ODFI to 

Satisfy Periodic Statement Requirement 

for Credit WEB Entries) to clarify the 

intent of language governing an ODFI’s 

periodic statement obligations with 

respect to the origination of CIE and 

credit WEB Entries by consumers. 

Periodic statement requirements 

typically are an obligation of the RDFI 

for the receipt of Entries to a consumer 

account. For CIE and WEB credits, 

however, the Originator of the ACH 

credit also is a consumer, thus putting 

periodic statement requirements on the 

ODFI as well for these entries. These 

clarifications do not affect the substance 

of the ODFI’s obligation to identify on 

the consumer Originator’s periodic 

statement the date, amount, and 

description of a transaction involving 

the consumer’s account; rather, they 

simply recognize that the debiting of the 

consumer’s account to provide funds for 

the CIE or WEB credit could be 

accomplished by something other than 

an ACH debit. 

We are accepting this amendment. 

ii. Clarifying the Commercially 

Reasonable Encryption Standard 

The NACHA Operating Rules require 

ACH participants to utilize a 

commercially reasonable standard of 

encryption technology when 

transmitting any banking information 

related to an Entry via an Unsecured 

Electronic Network. This amendment 

removed the reference to 128-bit 

encryption technology as the minimum 

acceptable commercially reasonable 

standard, but retained the general 

reference to using a commercially 

reasonable level of encryption. The 

amendment also clarified that a 

commercially reasonable level of 

security must comply with current, 

applicable regulatory guidelines, which 

already impose more rigorous 

encryption obligations. 

Prior to the amendment the NACHA 

Operating Rules established a minimum 

for this commercially reasonable 

encryption standard at the 128-bit RC4 

encryption technology level. A task 

force of NACHA’s former Internet 

Council, comprised of technology expert 

members, recommended that the 

specific reference to 128-bit RC4 

encryption be removed, on the grounds 

that it is now out of date as a 

commercially reasonable standard. 

We are accepting this amendment. 

iii. Definition of Zero-Dollar Entry 

This amendment reintroduced the 

definition of a Zero-Dollar Entry within 

Article Eight (Definitions of Terms Used 

in These Rules) to correspond to unique 

technical references in the Appendices 

of the NACHA Operating Rules. Zero 

Dollar Entries are unique in that, 

although their dollar amount is zero, 

they bear remittance data that must be 

provided to the Receiver in an identical 

manner as ‘‘live’’ entries that transfer 

funds. The definition was removed in 

2010 when the definition of a ‘‘NonMonetary Entry’’ was introduced into 

the NACHA Operating Rules. 

We are accepting this amendment. 

iv. Expansion of Permissible Criteria for 

ODFI Requests for Return 

In addition to being able to request 

the return of an Erroneous Entry, as 

permitted by the NACHA Operating 

Rules, this amendment revised the 

NACHA Operating Rules to permit an 

ODFI to request that an RDFI return any 

Entry that the ODFI claims was 

originated without the authorization of 

the Originator. This amendment also 

expanded the description of Return 

Reason Code R06 (Returned per ODFI’s 

Request) to include Entries returned by 

the RDFI for this reason. This newly 


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permissible circumstance reflects actual 

current industry practice with regard to 

the recovery of funds related to 

unauthorized credit origination. 

Use of the ODFI Request for Return 

process is always optional on the part of 

both ODFIs and RDFIs. An RDFI will 

continue to be able to make its own 

business decision about whether to 

agree to return an Entry that the ODFI 

claims was originated without the 

authorization of the Originator. An RDFI 

responding to a request for the return of 

such an Entry will be indemnified 

under the NACHA Operating Rules 

against loss or liability by the ODFI. 

We are accepting this amendment. 

D. Notification of Reversals 

NACHA Operating Rule 2.9.1 requires 

that the Originator of a Reversing Entry 

make a reasonable attempt to notify the 

Receiver of the Reversing Entry and the 

reason for the Reversing Entry no later 

than the settlement date of the Entry. 

For the reasons discussed in Section I 

above, we are accepting this 

amendment. 

E. Prepaid Cards 

In 2010, Fiscal Service amended part 

210 to establish requirements that 

prepaid accounts receiving Federal 

payments must meet. 75 FR 80335. To 

be eligible to receive Federal payments, 

a card accessing a prepaid account must 

meet four conditions: (1) The card 

account must be held at an insured 

financial institution; (2) the account be 

set up to meet the requirements for pass 

through deposit or share insurance 

under 12 CFR part 330 or 12 CFR part 

745; (3) the account may not be attached 

to a line of credit or loan agreement 

under which repayment from the card 

account is triggered by delivery of the 

Federal payment; and (4) the issuer of 

the card must comply with all of the 

requirements, and provide the Federal 

payment recipient with the same 

consumer protections, that apply to a 

payroll card under regulations 

implementing the Electronic Fund 

Transfer Act, 15 U.S.C. 1693a(1). See 31 

CFR 210.5(b)(5)(i). 

We required that issuers of prepaid 

cards provide Regulation E payroll card 

protections because when our prepaid 

rule was issued in 2010, Regulation E 

did not cover any prepaid cards other 

than payroll cards. However, on 

November 22, 2016, the Consumer 

Financial Protection Bureau (CFPB) 

published its final rule to amend 

Regulation E to cover prepaid accounts. 

81 FR 83934. We are therefore amending 

our prepaid rule to replace the reference 

in § 210.5(b)(5)(i)(D) to ‘‘payroll card’’ 

with a reference to ‘‘prepaid account’’ so 

that issuers of prepaid accounts are 

required to provide the holder of an 

account with all of the consumer 

protections that apply to a prepaid 

account under the rules implementing 

the Electronic Fund Transfer Act. We 

are also conforming the references to 

use the CFPB’s terminology of ‘‘prepaid 

account’’ rather than ‘‘prepaid card.’’ 

These changes are effective on April 1, 

2018, the effective date of the CFPB’s 

final rule. 

III. Section-by-Section Analysis 

In order to incorporate in part 210 the 

NACHA Operating Rule changes that we 

are accepting, we are replacing 

references to the 2013 NACHA 

Operating Rules & Guidelines book with 

references to the 2016 NACHA 

Operating Rules & Guidelines book. 

Several of the NACHA Operating Rule 

amendments that we are not 

incorporating are modifications to 

provisions of the NACHA Operating 

Rules that are already excluded under 

part 210. Other than replacing the 

references to the 2013 NACHA 

Operating Rules & Guidelines book, no 

change to part 210 is necessary to 

exclude those amendments. 

§ 210.2 

We are amending the definition of 

‘‘applicable ACH Rules’’ at § 210.2(d) to 

reference the rules published in 

NACHA’s 2016 Rules & Guidelines book 

rather than the rules published in 

NACHA’s 2013 Rules & Guidelines 

book. The definition has been updated 

to reflect the reorganization and 

renumbering of the NACHA Operating 

Rules. The reference in § 210.2(d)(5) to 

Section 2.17 has been revised to read 

Section 2.17.2.2–2.17.2.6 in order to 

carve out the return rate level reporting 

obligation. The reference in § 210.2(d)(6) 

to the NACHA Operating Rule 

governing International ACH 

Transactions section has been updated 

by replacing an obsolete reference to 

ACH Rule 2.11 with the correct 

reference to Section 2.5.8. A new 

paragraph (7) is added to exclude from 

part 210, until September 15, 2017, the 

provisions of Subsection 3.3.1.1, Section 

8.99 and Appendix Three (definition of 

Effective Entry Date) relating to SameDay Entries. 

§ 210.3(b) 

We are amending § 210.3(b) by 

replacing the references to the ACH 

Rules as published in the 2013 Rules & 

Guidelines book with references to the 

ACH Rules as published in the 2016 

NACHA Operating Rules & Guidelines 

book. We are revising § 210.3(b) by 

consolidating former paragraphs (b)(1) 

and (b)(2) into a single paragraph. 

Previously, paragraph (b)(2) stated that 

any amendment to the applicable ACH 

Rules approved by NACHA after 

publication of the edition of the NACHA 

Operating Rules & Guidelines that are 

incorporated by reference do not apply 

to Government entries unless Fiscal 

Service expressly accepts the 

amendments by publishing notice of 

acceptance of the amendment in the 

Federal Register. We have replaced 

paragraph (b)(2) with a sentence that 

states that, to enforce an edition other 

than that specified in § 210.3(b), Fiscal 

Service must publish a document in the 

Federal Register and the material must 

be available to the public. The 

replacement wording is the standard 

sentence recommended by the Federal 

Register, and is not substantively 

different from the former paragraph 

(b)(2). 

§ 210.5 

We are amending § 210.5(b)(5)(i)(D) to 

replace the references to ‘‘payroll card’’ 

with references to ‘‘prepaid account’’ in 

order to require issuers of prepaid 

accounts to which Federal payments are 

delivered to provide account holders 

with all of the consumer protections 

that will apply to a prepaid account 

under the rules adopted by the CFPB to 

implement the Electronic Fund Transfer 

Act and the Truth in Lending Act. These 

changes are effective on April 1, 2018, 

the effective date of the CFPB’s final 

rule. 

§ 210.6 

In § 210.6 we are replacing the 

reference to ACH Rule 2.4.4 with a 

reference to ACH Rule 2.4.5 to reflect 

the re-numbering of ACH Rule 2.4.4. 

This change is not substantive. 

§ 210.8 

In § 210.8(b) we are replacing the 

reference to ACH Rule 2.4.4 with a 

reference to ACH Rule 2.4.5 to reflect 

the re-numbering of ACH Rule 2.4.4. 

This change is not substantive. 

IV. Incorporation by Reference 

In this rule, Fiscal Service is 

incorporating by reference the 2016 

NACHA Operating Rules & Guidelines 

book. The Office of Federal Register 

(OFR) regulations require that agencies 

discuss in the preamble of a final rule 

ways that the materials the agency 

proposes to incorporate by reference are 

reasonably available to interested 

parties or how it worked to make those 

materials reasonably available to 

interested parties. In addition, the 

preamble of the rule must summarize 

the material. 1 CFR 51.5(a). In 


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accordance with OFR’s requirements, 

the discussion in the SUPPLEMENTARY

INFORMATION section summarizes the 

2016 NACHA Operating Rules. 

Financial institutions utilizing the ACH 

Network are bound by the NACHA 

Operating Rules and have access to the 

NACHA Operating Rules in the course 

of their everyday business. The NACHA 

Operating Rules are available as a bound 

book or in online form from NACHA— 

The Electronic Payments Association, 

2550 Wasser Terrace, Suite 400, 

Herndon, Virginia 20171, tel. 703–561– 

1100, info@nacha.org. 

V. Procedural Analysis 

Regulatory Planning and Review 

The rule does not meet the criteria for 

a ‘‘significant regulatory action’’ as 

defined in Executive Order 12866. 

Therefore, the regulatory review 

procedures contained therein do not 

apply. 

Congressional Review Act (CRA) 

This rule is not a major rule pursuant 

to the CRA, 5 U.S.C. 801 et seq. It is not 

expected to lead to any of the results 

listed in 5 U.S.C. 804(2). This rule will 

take effect upon publication in the 

Federal Register. The amendment to 

§ 210.5 is applicable on April 1, 2018. 

Administrative Procedure Act 

Except for the amendments to § 210.5, 

this final rule is effective on September 

11, 2017. Under the Administrative 

Procedure Act, a final rule may be 

published less than 30 days before its 

effective date ‘‘for good cause found and 

published with the rule.’’ 5 U.S.C. 

553(d)(3). The purpose of a delayed 

effective date is to permit regulated 

entities to adjust their behavior before 

the final rule takes effect. As discussed 

above, this rule adopts, with some 

exceptions, the NACHA Operating Rules 

developed by NACHA—The Electronic 

Payments Association (NACHA) as the 

rules governing the use of the ACH 

Network by Federal agencies. The 

affected industry is already prepared for 

Federal agencies to implement this rule. 

Therefore, the Department of the 

Treasury finds good cause to dispense 

with a delayed effective date. 

Regulatory Flexibility Act Analysis 

It is hereby certified that the rule will 

not have a significant economic impact 

on a substantial number of small 

entities. The rule imposes on the 

Federal government a number of 

changes that NACHA—The Electronic 

Payments Association, has already 

adopted and imposed on private sector 

entities that utilize the ACH Network. 

The rule does not impose any additional 

burdens, costs or impacts on any private 

sector entities, including any small 

entities. Accordingly, a regulatory 

flexibility analysis under the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) is 

not required. 

Unfunded Mandates Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, 2 U.S.C. 

1532 (Unfunded Mandates Act), 

requires that the agency prepare a 

budgetary impact statement before 

promulgating any rule likely to result in 

a Federal mandate that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. If a budgetary impact 

statement is required, section 205 of the 

Unfunded Mandates Act also requires 

the agency to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating the 

rule. We have determined that the rule 

will not result in expenditures by State, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

Accordingly, we have not prepared a 

budgetary impact statement or 

specifically addressed any regulatory 

alternatives. 

List of Subjects in 31 CFR Part 210 

Automated clearing house, Electronic 

funds transfer, Financial institutions, 

Fraud, Incorporation by reference. 

Words of Issuance 

For the reasons set out in the 

preamble, 31 CFR part 210 is amended 

as follows: 

PART 210—FEDERAL GOVERNMENT 

PARTICIPATION IN THE AUTOMATED 

CLEARING HOUSE 

■ 1. The authority citation for part 210 

continues to read as follows: 

Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 

U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 

3720. 

■ 2. Section 210.2 is amended by 

revising paragraph (d) to read as 

follows: 

§ 210.2 Definitions. 

* * * * * 

(d) Applicable ACH Rules means the 

ACH Rules with an effective date on or 

before March 16, 2018, as published in 

‘‘2016 NACHA Operating Rules & 

Guidelines: A Complete Guide to Rules 

Governing the ACH Network’’ 

(incorporated by reference, see 

§ 210.3(b)) except: 

(1) Subsections 1.2.2, 1.2.3, 1.2.4, 

1.2.5 and 1.2.6; Appendix Seven; 

Appendix Eight; Appendix Nine and 

Appendix Ten (governing the 

enforcement of the ACH Rules, 

including self-audit requirements, and 

claims for compensation); 

(2) Section 2.10 and Section 3.6 

(governing the reclamation of benefit 

payments); 

(3) The requirement in Appendix 

Three that the Effective Entry Date of a 

credit entry be no more than two 

Banking Days following the date of 

processing by the Originating ACH 

Operator (see definition of ‘‘Effective 

Entry Date’’ in Appendix Three); 

(4) Section 2.2 (setting forth ODFI 

obligations to enter into agreements 

with, and perform risk management 

relating to, Originators and Third-Party 

Senders) and Section 1.6 (Security 

Requirements); 

(5) Section 2.17.2.2–2.17.2.6 

(requiring reduction of high rates of 

entries returned as unauthorized); 

(6) The requirements of Section 2.5.8 

(International ACH Transactions) shall 

not apply to entries representing the 

payment of a Federal tax obligation by 

a taxpayer; and 

(7) Until September 15, 2017, the 

provisions of Subsection 3.3.1.1, Section 

8.99 and Appendix Three (definition of 

Effective Entry Date) relating to SameDay Entries. 

* * * * * 

■ 3. Section 210.3 is amended by 

revising paragraph (b) to read as follows: 

§ 210.3 Governing law. 

* * * * * 

(b) Incorporation by reference. Certain 

material is incorporated by reference 

into this part with the approval of the 

Director of the Federal Register under 5 

U.S.C. 552(a) and 1 CFR part 51. To 

enforce any edition other than that 

specified in this section the Service 

must publish a document in the Federal 

Register and the material must be 

available to the public. All approved 

material is available for inspection at 

the Bureau of the Fiscal Service, 401 

14th Street SW., Room 400A, 

Washington, DC 20227, 202–874–6680, 

and is available from the sources listed 

below. It is also available for inspection 

at the National Archives and Records 

Administration (NARA). For 

information on the availability of this 

material at NARA, call 202–741–6030 or 

go to https://www.archives.gov/federalregister/cfr/ibr-locations.html. 

(1) NACHA—The Electronic 

Payments Association, 2550 Wasser 

Terrace, Suite 400, Herndon, Virginia 

20171, tel. 703–561–1100, info@

nacha.org. 

(i) ‘‘2016 NACHA Operating Rules & 

Guidelines: A Complete Guide to Rules 


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Federal Register / Vol. 82, No. 174 / Monday, September 11, 2017 / Rules and Regulations 42609 

Governing the ACH Network,’’ 

copyright 2016. 

(ii) [Reserved] 

(2) [Reserved] 

* * * * * 

■ 4. Section 210.5 is amended by 

revising paragraph (b)(5) to read as 

follows: 

§ 210.5 Account requirements for Federal 

payments. 

* * * * * 

(b) * * * 

(5)(i) Where a Federal payment is to 

be deposited to a prepaid account that 

meets the following requirements: 

(A) The account is held at an insured 

financial institution; 

(B) The account is set up to meet the 

requirements for pass-through deposit 

or share insurance such that the funds 

accessible through the card are insured 

for the benefit of the recipient by the 

Federal Deposit Insurance Corporation 

or the National Credit Union Share 

Insurance Fund in accordance with 

applicable law (12 CFR part 330 or 12 

CFR part 745); 

(C) The account is not attached to a 

line of credit or loan agreement under 

which repayment from the account is 

triggered upon delivery of the Federal 

payments; and 

(D) The issuer of the account complies 

with all of the requirements, and 

provides the holder of the account with 

all of the consumer protections, that 

apply to a prepaid account under the 

rules implementing the Electronic Fund 

Transfer Act and the Truth in Lending 

Act. 

(ii) No person or entity may issue a 

prepaid account that receives Federal 

payments in violation of this paragraph 

(b)(5), and no financial institution may 

maintain a prepaid account that receives 

Federal payments if the issuer violates 

this paragraph (b)(5). 

(iii) For the purposes of this 

paragraph (b)(5), the term— 

(A) ‘‘Prepaid account’’ means a 

prepaid account as defined for purposes 

of regulations implementing the 

Electronic Fund Transfer Act, as 

amended; and 

(B) ‘‘Issuer’’ means a person or entity 

that issues a prepaid account. 

* * * * * 

■ 5. Section 210.6 is revised to read as 

follows: 

§ 210.6 Agencies. 

Notwithstanding any provision of the 

ACH Rules, including Subsections 2.4.5, 

2.8.4, 4.3.5, 2.9.2, 3.2.2, and 3.13.3, 

agencies shall be subject to the 

obligations and liabilities set forth in 

this section in connection with 

Government entries. 

(a) Receiving entries. An agency may 

receive ACH debit or credit entries only 

with the prior written authorization of 

the Service. 

(b) Liability to a recipient. An agency 

will be liable to the recipient for any 

loss sustained by the recipient as a 

result of the agency’s failure to originate 

a credit or debit entry in accordance 

with this part. The agency’s liability 

shall be limited to the amount of the 

entry(ies). 

(c) Liability to an originator. An 

agency will be liable to an Originator or 

an ODFI for any loss sustained by the 

originator or ODFI as a result of the 

agency’s failure to credit an ACH entry 

to the agency’s account in accordance 

with this part. The agency’s liability 

shall be limited to the amount of the 

entry(ies). 

(d) Liability to an RDFI or ACH 

association. Except as otherwise 

provided in this part, an agency will be 

liable to an RDFI for losses sustained in 

processing duplicate or erroneous credit 

and debit entries originated by the 

agency. An agency’s liability shall be 

limited to the amount of the entry(ies), 

and shall be reduced by the amount of 

the loss resulting from the failure of the 

RDFI to exercise due diligence and 

follow standard commercial practices in 

processing the entry(ies). This section 

does not apply to credits received by an 

RDFI after the death or legal incapacity 

of a recipient of benefit payments or the 

death of a beneficiary as governed by 

subpart B of this part. An agency shall 

not be liable to any ACH association. 

(e) Acquittance of the agency. The 

final crediting of the amount of an entry 

to a recipient’s account shall constitute 

full acquittance of the Federal 

Government. 

(f) Reversals. An agency may reverse 

any duplicate or erroneous entry, and 

the Federal Government may reverse 

any duplicate or erroneous file. In 

initiating a reversal, an agency shall 

certify to the Service that the reversal 

complies with applicable law related to 

the recovery of the underlying payment. 

An agency that reverses an entry shall 

indemnify the RDFI as provided in the 

applicable ACH Rules, but the agency’s 

liability shall be limited to the amount 

of the entry. If the Federal Government 

reverses a file, the Federal Government 

shall indemnify the RDFI as provided in 

the applicable ACH Rules, but the 

extent of such liability shall be limited 

to the amount of the entries comprising 

the duplicate or erroneous file. 

Reversals under this section shall 

comply with the time limitations set 

forth in the applicable ACH Rules. 

(g) Point-of-purchase debit entries. An 

agency may originate a Point-ofPurchase (POP) entry using a check 

drawn on a consumer or business 

account and presented at a point-ofpurchase. The requirements of the 2016 

NACHA Operating Rules & Guidelines, 

incorporated by reference, see 

§ 210.3(b)(2), shall be met for such an 

entry if the Receiver presents the check 

at a location where the agency has 

posted the notice required by the ACH 

Rules and has provided the Receiver 

with a copy of the notice. 

(h) Return Fee Entry. An agency that 

has authority to collect returned item 

service fees may do so by originating a 

Return Fee Entry if the agency provides 

notice to the Receiver in accordance 

with the ACH Rules. 

■ 6. Section 210.8 is amended by 

revising paragraphs (a) and (b) to read 

as follows: 

§ 210.8 Financial institutions. 

(a) Status as a Treasury depositary. 

The origination or receipt of an entry 

subject to this part does not render a 

financial institution a Treasury 

depositary. A financial institution shall 

not advertise itself as a Treasury 

depositary on such basis. 

(b) Liability. Notwithstanding ACH 

Rules Subsections 2.4.5, 2.8.4, 4.3.5, 

2.9.2, 3.2.2, and 3.13.3, if the Federal 

Government sustains a loss as a result 

of a financial institution’s failure to 

handle an entry in accordance with this 

part, the financial institution shall be 

liable to the Federal Government for the 

loss, up to the amount of the entry, 

except as otherwise provided in this 

section. A financial institution shall not 

be liable to any third party for any loss 

or damage resulting directly or 

indirectly from an agency’s error or 

omission in originating an entry. 

Nothing in this section shall affect any 

obligation or liability of a financial 

institution under Regulation E, 12 CFR 

part 1005, or the Electronic Funds 

Transfer Act, 12 U.S.C. 1693 et seq. 

* * * * * 

Dated: September 5, 2017. 

David Lebryk, 

Fiscal Assistant Secretary. 

[FR Doc. 2017–19135 Filed 9–7–17; 4:15 pm] 

BILLING CODE P 


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