The Importance of Maintaining Up-to-Date Routing Information
Author

On Dec. 16, Nacha issued Operations Bulletin #4-2024 to emphasize the critical importance of maintaining up-to-date routing transit number information. Since issuing the bulletin, Nacha has received reports from financial institutions about adverse customer impacts caused by the failure to maintain accurate routing information. The reports illustrate how inaccurate information presents an operational risk for an ODFI that can cause inconvenience to Originators and Receivers, consumer harm, and reputational damage to other institutions.
In one example, an RDFI in a correspondent relationship repurposed a routing number to receive entries for one of its client institutions. The RDFI confirmed that the number and name of the institution appeared correctly in the FedACH® Participant Directory. Consumer customers of the client institution subsequently provided the routing number to Originators and authorized transactions to or from their accounts. Several ODFIs and service providers for those Originators declined to create the requested ACH Entries, citing an invalid RDFI routing number.
The failure of these ODFIs to maintain updated routing number information—and to push those numbers out to tables accessed by Originators to initiate transactions—caused an inconvenience for their Corporate Originators who found themselves caught between a frustrated Receiver who provided valid information to debit their account, and an ODFI that provided obsolete information. The ODFIs also caused potential harm to consumers who were unable to effect transactions that may have been essential for some aspect of the consumers’ lives. Finally, the ODFIs caused reputational damage to the RDFI by suggesting the RDFI had provided consumers with invalid information.
This example is one of many similar complaints indicating that financial institutions and service providers are not regularly updating routing number information in either primary systems or systems accessed by customers to initiate ACH transactions. Nacha urges all financial institutions to recognize the necessity of accurate routing number information to prevent avoidable instances of consumer harm, operational inefficiency for Originators, and reputational damage to financial institutions that have acted responsibly to provide accurate information.