Implementation of New Account Validation Rule Coming in March

Author

Michael W. Kahn

Michael W. Kahn

Nacha

It’s been more than two years since Nacha members approved a new Nacha Operating Rule on account validation for Internet-initiated debits. With the change of the calendar to 2021, the effective date of March 19 is just about upon us.

Under today’s Rules, Originators of WEB debit entries must use what the Rules call a “commercially reasonable fraudulent transaction detection system” to screen those entries for fraud. 

Starting this March, the new Rule will supplement this requirement by making it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” 

While the supplemental requirement applies to the first use of an account number, or changes to the account number, it’s neutral when it comes to any specific methods or technologies for accomplishing it. 

Implementation of the new Rule was delayed once, but it will begin on March 19, 2021. Due to the impact of COVID-19 on organizations’ staffing and resources, Nacha won’t enforce the Rule for an additional year for organizations that are working to comply but need additional time. Still, Nacha strongly encourages everyone to work towards compliance as soon as possible.

There’s a lot to consider, and hopefully, if your organization is affected by this Rule it’s already well down the road of compliance. If you’re only part of the way there, or haven’t set out yet, there’s still time—and Nacha can help. 

The place to start is at our Account Validation Resource Center, where you’ll find a wealth of materials, including details on the Rule, FAQs, an End User Briefing, a list of account validation vendors who are Nacha members, Preferred Partners or Nacha Certified, and a lot more. 
March 19 will be here soon enough. Now is the time to make sure you’re working towards compliance.

Visit Nacha’s Account Validation Resource Center