Catalyst News

Rollout of a Host of New ACH Rules Begins Sept. 20

by Catalyst Corporate | Aug 06, 2019

Same Day ACH continues to gain acceptance since its launch in September 2016. SDA transactions increased to 178 million in 2018, 137 percent more than in 2017 – SDA’s first full year. And now, Nacha is set to begin rolling out additional Same Day ACH enhancements. The first of three new SDA rules takes effect in the fall of 2019. Nacha also has rule changes slated for return reason code R11 and data security requirements. Here’s what you need to know:

1. Faster SDA Funds Availability (Effective Sept. 20, 2019)

The first rule increases the speed of funds availability for certain SDA and next-day ACH credits. Faster funds availability for same-day and next-day ACH credits aids both consumers and businesses that receive deposits and disbursements via ACH.

With this new rule, funds from SDA credits processed in the existing, first processing window (9:30 a.m. EST) will be made available by 1:30 p.m. in the RDFI's local time. Funds from non-SDA credits will be available by 9 a.m. RDFI’s local time on the settlement date, if credits were made available to the RDFI by 5 p.m. local time on the previous day (i.e., apply the existing “PPD rule” to all ACH credits).

2. Increased SDA Dollar Limit (Effective March 20, 2020)

The second rule increases the SDA per-transaction dollar limit to $100,000. Currently, SDA transactions are limited to $25,000 per transaction.

While the current limit covers approximately 98 percent of all ACH transactions, as well as 89 percent of B2B (business-to-business) transactions, a higher dollar limit would benefit some end users. Examples include SDA payments for payrolls, claims payments, B2B payments and reversals of larger pools of transactions.

3. Expanded SDA Access (Effective March 19, 2021)

The third rule expands access to SDA by the two ACH network operators. A third processing window provides two additional hours each business day, until 4:45 p.m. EST, to submit SDA transactions. Originating Depository Financial Institutions (ODFIs) and their customers will have a longer business day to initiate SDA payments such as payrolls, bill payments and business-to-business transactions.

Currently, the latest an ODFI can submit SDA transaction files to an ACH operator is 2:45 p.m. EST. The new processing window is intended to balance expanded access to SDA with minimal impact to financial institutions’ end-of-day operations and the re-opening of the next banking day/Fedwire re-opening at 9 p.m. EST. The proposed new window allows for closing Fedwire by 7 p.m. EST, with a two-hour window before re-opening.

4. Re-defining Return Reason Code R11 (Effective April 1, 2020)

The fourth rule changes the definition of Return Reason Code R11 from “Check Truncation Entry Return” to “Customer Advises Entry Not in Accordance with the Terms of the Authorization.” Return Reason Code R11 will be used by the Receiving Depository Financial Institution (RDFI) to return an entry for which the Originator and Receiver have a relationship and an authorization to debit exists, but there is an error or defect in the payment such that the entry does not conform to the terms of the authorization. The new definition and use of R11, along with the current definition and use of R10, does not include disputes about goods and services.

5. New Data Security Requirements (Effective June 2020 & June 2021)

The fifth rule adds stricter requirements to protect account numbers used in the initiation of ACH entries. These requirements apply to the electronic storage of account numbers only; paper authorizations are not included within this rule change. Each non-consumer originator, participating DFI, and Third-Party Service Provider must establish, implement, and update, as appropriate, policies, procedures, and systems with respect to the initiation, processing, and storage of entries that are designed to:  (a) protect the confidentiality and integrity of Protected Information until its destruction; (b) protect against anticipated threats of hazards to the security or integrity of Protected Information and its destruction; and (c) protect against unauthorized use of Protected Information that could result in substantial harm to a natural person.

This new rule will roll out in two parts. For Originators and Third-Parties that had an ACH volume greater than six million in 2019, the rule will take effect on June 30, 2020. Part two of this rule will take effect on June 30, 2021, for Originators and Third-Parties that have an ACH volume greater than two million in 2020.

For more information on this and other Nacha rules, visit For updates, information and questions on “all things ACH,” visit Catalyst Corporate’s ACH Central. Catalyst Corporate ACH users may also sign up to receive ACH operational insights through its ACH Advisor email newsletter.