A couple weeks ago, I wrote to inform you that the ACH Network was ready to handle the federal government’s Economic Impact Payments. This has proven to be true, as our ACH Operators and banks and credit unions of all types and sizes have delivered the initial round of 81 million Direct Deposits, totaling perhaps $150 billion or more, to American families on time on April 15, as instructed by the government.
The ACH Network is also handling Provider Relief Payments for medical facilities and healthcare providers; small business emergency grants and loans; and unemployment benefits by Direct Deposit for those needing it.
Unfortunately, there has been some public commentary that, as one newspaper’s editorial said, the “antiquated financial system is slowing distribution of federal stimulus to families.” One of the premises of this opinion piece is that the government sent the money on Friday, April 10, but that Americans didn’t receive it until Wednesday, April 15.
I do not doubt that a tweet by the government on Saturday, April 11, that it had “deposited” money into Americans’ bank accounts contributed to the misconception that the payments system takes five days to process payments, and also that, as one newspaper said, “many banks needed three business days to process the (payments).”
The facts are these:
The Nacha Rules allow for ACH credits, such as Direct Deposits, to use an effective date of either one or two banking days in the future, or, since 2016, a “same day” effective date. It is up to the sender—the “Originator”—to decide when it wants the money to be made available.
For the initial round of Economic Impact Payments, the payments had an effective date of Wednesday, April 15. Regardless of when ACH payment files were sent and received, settlement for the payments occurred, as instructed, at 8:30 a.m. ET on Wednesday, April 15. This is when the money was transferred from the government to banks’ and credit unions’ settlement accounts at the Federal Reserve. There is no mystery where the money was from the time the first file was transmitted on Friday to when Americans had access to the money on Wednesday—it was still with the government.
Nacha and our partners will continue to advocate for the ACH Network and set the record straight, both now during this national emergency, and into the future. There are more emergency and assistance payments coming, and the ACH Network is ready to handle those too. The ACH Network still stands ready to serve America’s people, its businesses and nonprofits, and the government.