July 13, 2021

Is Your Credit Union Making the Best Use of Technology to Ensure Compliance?


Samantha Carrier

Samantha Carrier

Senior Director, Emerging Strategic Initiatives


One of the few certainties in life is that ACH can reach every U.S. financial institution. From the credit union with a single office on Main Street, to the banks with branches in multiple states, and everything in between, ACH is a daily part of doing business. At a minimum your credit union is receiving ACH payments for members, including Direct Deposits of wages, Social Security, and tax refunds. You’re also likely originating ACH payments, and oftentimes that means having agreements with multiple third parties to make the process work.

Whether your credit union uses the ACH Network a little or a lot, there are rules to be followed and a legal and regulatory framework requiring compliance and controls. It’s more than just dotting i’s and crossing t’s. Stepping out of line can bring headaches; keeping in line is mission critical, but can be challenging, particularly for credit unions with smaller staffs. 

Regardless of size, whenever there are new rules and regulations, they almost certainly impact multiple departments at your organization. Making sure everyone is on the same—and correct—page is vital for robust compliance and audit preparation. And there’s even more to handle if your credit union is considering bringing some or all of its ACH processing in-house, a move Nacha Consulting is seeing by an increasing number of financial institutions.

That’s where technology can be a powerful tool. Numerous technological solutions are on the market, some very specific to ACH, meaning automation can be a major part of the solution. When routine—but highly important—processes are automated, credit unions get the consistency and stronger controls they need. Staff is freed up to do other things.

Most regulators and auditors will tell you the strongest controls you can have are systemic tools because they’re repeatable and remove human error from the equation. Technology can ensure that certain controls are automated, keeping them always in place and always working. If a task can be automated, whether handled in-house or through a service provider, give it serious consideration. 

For example, one key issue that Nacha Consulting has found can cause angst for financial institutions is ensuring that exposure limits are in place. A systemic control that puts an exposure limit on each originator is ideal for automation. The system will automatically keep track, do the math, and if the limit is reached, that transaction is held. Not only does that demonstrate your credit union complies with the rule requiring an exposure limit, it shows that you also enforce it. 

That’s just one example. When it comes to rules and regulations for not just ACH but everything a financial institution must comply with, the considerations are too long to list. At the same time, the list of technological solutions can seem almost as daunting. Nacha Consulting works with credit unions and banks of all sizes to evaluate their rules compliance and risk management, and to advise on technology tools.