*Indicates Attorney Speaker
Fundamentals of the ACH Network
Understanding the fundamentals of the ACH Network, such as payment flows, how rules impact specific Standard Entry Class Codes, and methods of dispute resolution are essential first steps to becoming proficient in payments. This on-demand session provides an overview of ACH, including the legal framework and the roles and responsibilities of Network participants. Also included will be a discussion of how other payment channels, including cards, wires, and emerging payments, impact and enhance the ACH Network.
*Jeanette Hait Blanco, General Counsel, Nacha
*Janice Havins, Executive Director, Assistant General Counsel, J.P. Morgan
Amy K. Morris, Senior Director, ACH Network Rules, Nacha
Fundamentals of Compliance & Risk Management
Establishing and maintaining a risk management program begins with understanding primary and ancillary risks, how to implement risk controls and mitigation solutions, and why the concept of testing – both to comply with industry rules and regulations as well as internal controls, audits and assessments are critical to ensuring both the safety of the ACH Network and protecting your organization from threats. This on-demand session is prerecorded and made available to participants prior to the program and serves as a foundation for the entirety of the Summit.
Joseph Casali, AAP, NCP, Executive Vice President, NEACH
*Jessica Perkins, Third Party Risk Manager, Central Payments, a division of Central Bank of Kansas City
Understanding the Basics of Payments Law
Understanding the fundamentals of payment laws and regulations is crucial to understanding how payments work. So is having a clear comprehension of how the laws and regulations interact with one another, particularly when there may be overlap. Which law applies to a payment transaction depends on who the end users are, what kind of institution acts as intermediary, and what form of transaction is used to move the money. The introduction of new kinds of payments service providers and completely new forms of currencies and payments is raising questions about what laws apply to “fintech.” With so many agencies overseeing overlapping aspects of the payments industry, sometimes different agencies seem to be taking contradictory views about emerging issues. This session delves into these issues and provides an overview of the most significant various laws and regulations governing payments, including Uniform Commercial Code Articles 3 and 4, the Expedited Funds Availability Act and Regulation CC, UCC Article 4A, the Electronic Funds Transfer Act and Regulation E, the CFPB’s authority to act against unfair deceptive, and abusive acts or practices. The session touches on the rules that structure the Federal Reserve’s payments services, including Regulation J and the Fed’s Operating Circulars. The speaker will also describe the OFAC/Bank Secrecy Act compliance regime that applies to all payments in the US.
*Richard Fraher, Founder & Principal, Payment Innovation & Regulation, LLC
The Law of ACH: Practical Application of the Nacha Operating Rules
Private sector rulemaking provides the flexibility to promptly identify and respond to participant requirements, new technologies, and define in sufficient detail the roles and responsibilities of participants in the ACH Network. From this foundation, the Nacha Operating Rules promote innovation, efficiency, interoperability, and provide security and certainty regarding these payments. The growth of the Network has been enabled through Nacha’s inclusive rulemaking processes, as well as its close cooperation with a broad variety of industry participants, governmental agencies, and regulators. This session examines the process by which the Nacha Operating Rules work in concert with applicable laws and regulations to provide a legal and business foundation for the use of electronic payments.
*Jeanette Hait Blanco, General Counsel, Nacha (Moderator)
Michael L. Herd, Senior Vice President, ACH Network Administration, Nacha
*Gretchen Elise Lamberg, Counsel, Banking & Financial Services, Sidley Austin LLP
New Rules & Enhancements from A Legal Perspective
Amendments to the Nacha Operating Rules are voted on by Nacha members following extensive input from Nacha’s Rules & Operations Committee. The need for change is evaluated based on marketplace needs and feedback from payments industry participants via a Request for Comment process. Between passage of a successful ballot and the implementation date, education becomes key. In 2020, Nacha implemented amendments pertaining to Warranty Claims, Data Security, and Reversals & Enforcement. Speakers in this session explain these changes, how proposed rule changes are evaluated by members and their impact on legal and compliance matters. A review of possible changes on the docket for 2022 is also discussed.
*Ivy Gupta, Senior Associate General Counsel and Senior Vice President, Truist Financial Corporation
Amy K. Morris, Senior Director, ACH Network Rules, Nacha
Contracts, Agreements, Authorizations & Authentications
This session examines how contracts and agreements comprise the foundation of the ACH Network with both originating (ODFIs) and receiving (RDFIs) financial institutions agreeing to abide by the Nacha Operating Rules and ACH Operator agreements, Originators agreeing to be bound to the Rules by their ODFIs, and RDFI depository agreements detailing the rights of the account holder. Additional agreements pertaining to Third Party Senders, Service Providers, and Sending Points also define the responsibilities of periphery participants. These contracts and agreements also impact the requirements of authorizations and authentication for payments in an ever-changing environment. Going beyond the requirements and differences between oral and written, single and recurring authorizations, speakers explain how to differentiate between an authentication and an authorization, and the proper methods to achieve them. Speakers review the elements of the e-Sign Act that should be included in a proper authorization.
*Scott Jones, Partner, Adams & Reese, LLP
*Jennifer Stokley, Senior Counsel, Wells Fargo
Payments After Dark: Managing High-Risk Payments
Financial institutions make business decisions to originate ACH transactions for clients, and it is incumbent on them to conduct appropriate due diligence and related risk management. With what could be considered to be high risk activity, it is imperative that the institution implements a robust and holistic risk management program throughout the life cycle that has active involvement and commitment across the organization. Online gaming, cannabis, adult entertainment and other transactions are examples of industries where banks have proceeded with caution. These industries could represent potential threats to payment systems so various payment systems define rules surrounding these payments, all with the goal to protect the integrity of the system as well as to limit possible risk to their clients. Speakers in this session discuss what constitutes “high risk” payments and the types and magnitude of transactions that give rise to such risks. Understand who needs to be involved and why, what process elements need to be considered, and what are potential client showstopper questions.
*Ellen Traupman Berge, Partner, Venable LLP
Banking Acts & Responding to Government Inquiries
The alphabet soup of compliance regulations and laws – BSA, AML, OFAC, USPATRIOT ACT, CARES, CARDS, etc. ranges from A-Z, but having a clear understanding of what the regulation and laws protect, and how to implement processes for ensuring compliance, can often be overwhelming. Further, understanding how to respond to subpoenas or issue Memorandums of Understanding, how to make efficient use of SARS reporting requirements and keeping up to date on the “greatest hits,” in addition to the new hits is critical for compliance and legal professionals. Simply understanding the regulations is often not enough. Parties also should know what State Banking Regulators on Audits and Responses are looking for as well. Speakers in this session provide a look at how the laws, rules and regulations harmonize to make internal processes work.
*Matthew C. Luzadder, Partner, Kelley Drye & Warren LLP
Navigating the Current Regulatory Environment
Regulatory agencies are constantly at work to create and implement rules and procedures to protect the integrity of the financial services industry. From the OCC and FDIC to the CFPB, CUNA, NAFCU and the FTC, Speakers in this session are comprised of current and previous Regulators as they provide a glimpse into provincial versus functional regulators – including auditors, examiners and supervisory positions and explore their role in the industry. Consumer protection organizations are constantly on the ready to adjust regulations for both financial institutions and new players in the fintech space. It is critical for payments lawyers and compliance professionals to understand differing points of view including those of fintechs, third parties, and financial institutions. Speakers in this session explore the “compliance sandbox” to determine where the industry is moving and how the industry can provide guidance via Requests for Comment and interacting with regulators to evaluate new types of banking entities and whether they will be allowed access to Fed accounts and Fed services.
*Christina Tetreault, Deputy Commissioner, Office of Financial Technology Innovation, California Department of Financial Protection & Innovation
Fraud Trends in Payments: Taking the Lead in Mitigation
Recognizing and mitigating new and emerging fraud schemes is essential to assess an organization’s risk appetite and ensure clean fraud hygiene as well as to provide a front line of defense against loss. Fraud threats change frequently, so being aware of recent trends is critical. The instructor is this session offers a look at the current fraud landscape while discussing how to mitigate specific threats – and how those actions could offer protection from other schemes looming in the background. This session allows attendees to get down to the details as they work together, using actual case studies from recent events to build a response plan to protect organization and mitigate risk.
James Hitchcock, VP, Fraud Mitigation, American Bankers Association
*Philip C. Picillo, Esq., CTP, SVP, Treasury & Payment Solutions, Webster Bank