Important changes to electronic payments will be taking place on September 15, 2017.
Effective September 15th, payments and transfers made via ACH could be debited (withdrawn) from your account on the same-day they are initiated. This change is being implemented to comply with NACHA’s (National Automated Clearing House Association) new rules for same day ACH processing.
What is an ACH transaction?
It is the electronic movement of funds between an originator and a receiver by means of the Automated Clearing House (ACH). If your payroll is direct deposited to your account it is most likely being deposited by means of an ACH transaction. (Your employer is the originator and you are the receiver) Likewise, if you pay your bills by disclosing your routing number and account number to a merchant these funds are being withdrawn from your account by means of an ACH transaction. (You are authorizing the entity you are paying to originate an ACH transaction from your account, the receiver)
What this change means for you?
Most member accounts have ACH transaction activity. ACH transactions can be originated electronically with the proper authorization, or they may be initiated from a written check that is converted to an ACH transaction. You may have noticed over the past several years that your checks or payments are withdrawn sooner from your account than they used to be. Now with the Same Day ACH rules, the items you authorize to be withdrawn from your account can settle the same day you give the authorization. This means more timely payments to merchants such as credit cards, mortgage holders or utilities. It also means that you need to make sure your deposit has been credited to your account and is not pending before you authorize a withdrawal from your account as the lag time or float time is disappearing.
The Federal Reserve will begin processing same-day ACH (automated Clearing House) debits.
Phase 1. Started in September 2016 - Allowed for an electronic credit to be posted to your account(s) on the day in which it is created by the sender
Phase 2. Goes into effect September 15, 2017 - will allow for an electronic debit to be posted to your account on the day in which it is created by the sender.
Phase 3. Will go into effect March 26, 2018 - requires receiving financial institutions to post both electronic debits and credits received on a given day by 5:00 pm local time.
This information is provided in order for you to be aware of the NACHA rule and how it may affect transactions on your account.
Tips to be Prepared?
- Don’t assume funds will clear the day after you make a purchase or payment. Make sure you have the money available in your account at the time you give your account number or write a check to any merchant or biller.
- Even if you write checks when making purchases in person, retailers can choose to convert your checks to ACH and now process them within hours of the same day.
- The credit union has no control over when transactions clear your account. It depends on when the company you scheduled the transaction with processes those transactions. We also cannot guarantee your direct deposit will go into your account before any transactions are processed that day.