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Nacha creates broadly adopted payment and financial messaging rules and standards through consensus-led governance, international collaboration, and innovative development practices. We continually advance the ubiquitous ACH Network and engage diverse stakeholders to accelerate a digital future of global financial services interoperability.

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Nacha Government Relations Update – Feb. 6, 2020

Nacha Submits a Statement for the Record to House Financial Services Fintech Task Force
Nacha submitted a Statement for the Record for the Congressional Hearing: “Is Cash Still King? Reviewing the Rise of Mobile Payments”. The statement was to support Direct Deposit and clarify misinformation on Direct Deposit availability versus paycheck availability. Click here for a hearing summary.

Nacha & PAs File Comments Supporting the Federal Government’s Use of ACH and Nacha Rules
Nacha provided comments on the notice of proposed rulemaking (the “Proposed Rule”) regarding Federal Government participation in the Automated Clearing House (“ACH”). Title 31 CFR Part 210 (“Part 210”) governs the use of the ACH Network by Federal agencies, and incorporates the Nacha Operating Rules (“Nacha Rules”) published by Nacha, with certain exceptions. The Proposed Rule would amend Part 210 to incorporate amendments to the Nacha Rules through 2019, to identify provisions of such amendments and other Nacha Rules that would not apply to Federal agencies.

Comptroller of the Currency Indicates Banks May Soon Receive Direction Re: Small-dollar Loans
At a recent press roundtable, Comptroller of the Currency Joseph Otting told reporters that he and bank regulators such as the OCC hope to soon take action that will allow banks to more easily offer small-dollar loans (ranging between a few hundred to a few thousand dollars). It is hoped that banks will then offer these types of loans more widely to provide consumers with an alternative to using payday lenders and check cashers. “The national banks are waiting to see what the regulatory community is going to come up with in the form of either guidance or a rule, and we’re hopeful that we’re going to be able to produce a joint agency document sometime early this year,” Otting stated.

Since the OCC’s May 2018 bulletin encouraging financial institutions to begin offering installment loans with terms from 45 days to one year, only a very small number of banks have done so. The only large bank to provide such an offering so far is U.S. Bank with its “Simple Loan” product, which makes installment loans of $100-$1000 available to its checking account customers. Otting indicated that the U.S. Bank product aligns well with his vision of what he would like to see more financial institutions offer, stating: “That product has kind of like hit the button, so to speak, of fulfilling the needs of a client of theirs that doesn’t force them outside the banking system to find a product like that.” However, U.S. Bank’s product also highlights a conflict between regulators and legislators on this topic. House Financial Services Chairwoman, Maxine Waters has expressed that she would like to impose a 36 percent rate cap on all consumer loans, which banks say would make it more difficult for them to then offer small-dollar loans as widely without incurring losses.

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