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NEWS RELEASE
CONTACTS:
NACHA
Michael Herd (media only)
mherd@nacha.org
Deborah Shaw, AAP
dshaw@nacha.org
NACHA Requires Lockbox Conversion Opt-Out
Herndon, Virginia, March 1, 2004 – The voting members of NACHA – The Electronic Payments Association have approved an amendment to the Accounts Receivable (ARC) Entry rules that requires companies that originate ARC payments to provide consumers with the ability to choose not to have their checks converted to automated clearing house (ACH) debits. The provision becomes effective on June 11, 2004.
The new rule will likely have little practical effect. A NACHA survey found that 93 percent of companies that originate ARC payments already provide the ability to opt-out. In many cases, less than 1 percent of consumers are electing to opt-out.
“Consumer acceptance of check conversion has been extremely high,” said Elliott C. McEntee, President and Chief Executive Officer of NACHA. “NACHA’s new rule ensures that the small percentage of consumers who prefer not to have their checks converted will be accommodated.”
Consumers who opt-out of check conversion may still experience electronic check processing. Beginning on October 28, 2004, all checks become eligible to be processed electronically under the framework established by the Check Clearing for the 21st Century Act.
The ARC application became effective on March 15, 2002, and allows checks delivered to remittance and lockbox locations to be converted into ACH debits. NACHA estimates that in 2003, there were 220 million ARC payments, including on-us payments. ARC is used almost entirely for consumer bill payments such as credit cards, mortgages, insurance, and telecommunications.
About NACHA - The Electronic Payments Association
NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT). Visit NACHA on the Internet at
www.nacha.org.
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