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Lessons Learned from Same-Day ACH
Monday, March 5, 2018 6:30 AM

Justin Lutes, AAP, NCP, Vice President, Correspondent Services, Catalyst Corporate FCU

It may seem like just yesterday when Same-Day ACH became mandatory for credit unions, but it’s been nearly two years since ODFIs and RDFIs began implementing the first of a three-phase process. On March 16, Phase 3 of Same-Day ACH will complete this two-year transition. 

For most financial institutions, implementation of Phase 1 and Phase 2 went off without a hitch, and Same-Day acceptance is looking promising.

For instance, a recent NACHA study shows 82 percent of financial institutions anticipate Same-Day ACH debit volume to grow at a rapid or steady rate, and 78 percent expect ACH credit volume to grow at a steady rate over the next six to nine months.

The study included 22 financial institutions representative of 78 percent of the ACH Network origination volume. Of the ODFIs surveyed, 84 percent reported their actual Same-Day debit volume was the same or higher than anticipated, and 90 percent of RDFIs echoed that sentiment.

What’s most notable is that while volume is increasing quickly, there is no indication of increased fraud. This is all great news!

With implementation of the final phase of Same-Day ACH just a couple weeks away, credit unions can begin discussing even more ways to assist members with faster ACH payments. However, let’s first look at a few lessons we’ve learned along the way.

Unintended Consequences.
Many credit unions intend to have an item process the next day, but sometimes staff or employees enter a current date or a stale date (previous date) in the Effective Date space and release the ACH file before 12:45 p.m. CT. These items are processing as Same-Day items. The good news is there’s an easy fix. Simply pay close attention to the Effective Dates and release times when processing Same-Day items.

Late Returns. 
It’s always better to be safe than sorry, so don’t delay processing returns for Same-Day items. Remember, the return window for Same-Day items always begins on the settlement date of the item. 

Keeping the Balance.
Accidents happen; it’s human nature. But it’s imperative to identify and correct those mistakes as soon as possible to minimize the damage. For example, if an ODFI sends an item in error and applies a credit without a debit, a member can withdraw the credit before the credit union reverses it from the account. This results not only in a misappropriation of funds, but also decreases confidence in an institution. Balancing daily helps to minimize this risk.

On the Clock.
Another reason balancing daily is imperative is that RDFIs have such a short window of opportunity to send returns to the ODFI. If not completed in the allotted time, it may result in a loss to the RDFI. Conversely, when ODFIs receive items from RDFIs and don’t act quickly enough, they are out of Same-Day compliance.

Same-Day ACH transition is winding down, but that doesn’t mean questions will. Tools like Catalyst Corporate’s ACH Central and NACHA’s resource center are available 24/7 to help credit unions navigate the twists and turns of Same-Day ACH, including what’s coming in Phase 3.

Catalyst Corporate Federal Credit Union is a five-star endorsed business partner of Credit Union Resources, Inc., a wholly owned subsidiary of the Cornerstone Credit Union League.