Nacha’s Rule to Address Excessive Transaction Return Levels Goes into Effect

HERNDON, Va., Sept. 18, 2015 – Nacha—The Electronic Payments Association® announced that the ACH Network Risk and Enforcement Rule goes into effect today. The amendment to the Nacha Operating Rules will help improve the overall quality of the ACH Network by reducing the incidence of ACH transactions that result in exceptions and returns.
“This Rule amendment is part of Nacha’s ongoing efforts to maintain and improve the strength and quality of the ACH Network for the consumers, governments, businesses and financial institutions that move their money via ACH,” said Janet O. Estep, president and CEO of Nacha. “The Rule demonstrates the value of the financial industry coming together through private-sector rulemaking to address practices that may result in harm to consumers.”
The ACH Network Risk and Enforcement Rule improves Nacha’s ability to identify and enforce the Rules against “outlier” Originators that may be responsible for the highest and most disproportionate levels of exceptions and returns, which impose costs on Receiving Depository Financial Institutions (RDFIs) and can impact their customers.
The Rule lowers the existing return threshold for unauthorized transactions from 1.0 percent to 0.5 percent, and expands Nacha’s authority to enforce the Rules related to unauthorized transactions. The Rule also establishes an inquiry process that can be used when an Originator or Third-Party Sender exceeds an administrative return rate level of 3.0 percent and/or an overall return rate level of 15.0 percent.  While exceeding these new return rate levels is not automatically considered a violation of the Nacha rules, Originators and Third-Parties can be required to reduce their return rates when an inquiry shows that poor origination practices have resulted in excessive returns. 
Additionally, the Rule defines permissible practices for use of the ACH Network to collect transactions that were previously returned for insufficient funds and other reasons, and outlines standard, required information to be included in a “reinitiated” transaction.
“Excessive levels of returned transactions impose costs, both financial and reputational, on the ACH Network and its participants,” said Estep. “The new Rule will help reduce these costs, and ultimately increase customer satisfaction with the ACH Network by reducing the volume of transactions subject to customer disputes.”
For more information about the ACH Network Risk and Enforcement Rule, or for resources to support implementation, visit the Nacha website. Also visit for information about Nacha’s rulemaking process.