2021 Nacha Operating Rules - Paynetworx LLC

1 2021 nacha operating rules Introduction The Nacha Operating Rules & Guidelines is an annual publication produced by Nacha . Nacha is a nonprofit organization that convenes hundreds of diverse organizations to enhance and enable electronic payments and financial data exchange within the and across geographies. Through development of Rules , standards, governance, education, advocacy, and in support of innovation, Nacha s efforts benefit the providers and users of those systems. Nacha leads groups focused on API standardization, authors the Quest Operating Rules for EBT, and is the steward of the ACH Network, a payment system that universally connects all bank accounts and facilitates the movement of money and information.

2 In 2019, billion payments and nearly $56 trillion in value moved across the ACH Network. The Nacha Operating Rules ( Rules ) provide users with the legal framework for the ACH Network, while the Nacha Operating Guidelines (Guidelines) provide guidance on implementing the Rules . The Rules and the Guidelines serve as the definitive s ources of information governing the exchange and settlement of electronic funds transfers through the ACH Network. In the case of any inconsistency or conflict between the Rules and the Guidelines, the Nacha Operating Rules govern. The Rules are organized around the types of participants in the ACH Network and acknowledge the major roles played by originating and receiving financial institutions, therefore dedicating large sections to each of these roles.

3 The Rules explicitly recognize that originating financial institutions are the entry points into the ACH Network for corporate users and Third Parties, and that these financial institutions are responsible for those parties compliance with the Rules . To ensure compliance with current regulations, all ACH Network participants must obtain the 2021 edition of the Nacha Operating Rules . Participants can purchase the Nacha Operating Rules & Guidelines from Nacha or any of the Payments Associations listed behind the title page of this Federal Government payments are governed by 31 Part 210. As of May 1999, 31 Part 210 adopted the Nacha Operating Rules as the Rules governing all Federal Government payments, with certain exceptions.

4 The most current version of 31 Part 210 may be obtained from the Electronic Code of Federal Regulations website at 1 Although various versions of the Nacha Operating Rules & Guidelines are available for purchase (online, digital and print), the printed version of the Rules governs in the event of a discrepancy or inconsistency. HOW TO USE THIS BOOK This publication is divided into two sections: the Nacha Operating Rules and the Nacha Operating Guidelines. The Nacha Operating Rules provide the legal foundation for the ACH Network. The introductory pages of this section contain the following material: Revisions to the Nacha Operating Rules : This section summarizes amendments to the Nacha Operating Rules that have been approved by the Nacha voting membership during the last year.

5 Read this section first to get an overview of recent developments and their impact on operations. Nacha Board of Directors Policy Statements: This section provides guidance from the Board of Directors on topics of importance to the ACH Network. Formal Rules Interpretations: This section contains formal interpretations of the Nacha Operating Rules , as approved and issued by the Nacha Board of Directors. Interpretations contained in this Section are as binding as the Nacha Operating Rules themselves and have been issued to clarify the provisions of the Nacha Operating Rules or to provide guidance about whether a particular use or application is consistent with the Rules .

6 Such interpretations may also have been issued for other purposes, as deemed appropriate by the Board. Schedule of Fees: This section details the amounts of both the annual and per-entry fees, as determined from time to time by the Nacha Board of Directors. This section also includes the amount of the Same Day Entry Fee and the Unauthorized Entry Fee, as determined by the methodology described in the Nacha Operating Rules . The body of the Nacha Operating Rules contains language relating to both current Rules and rule changes that will take effect later in the year. This edition of the Rules contains new rule text, which is in italics and highlighted.

7 Rule changes within the text are indicated by a marker in the left margin, with approval and effective dates for those changes noted at the bottom of the page. Example: SECTION Prearranged Payment and Deposit Entry or PPD Entry or PPD Section Prearranged Payment and Deposit Entry or PPD Entry or PPD a credit or debit Entry initiated by an Organization to a Consumer Account of a Receiver based on a standing or a Single Entry authorization from the Receiver. a credit or debit Entry initiated by an Organization to a Consumer Account of a Receiver based on an authorization from the Receiver. Pages in the Nacha Operating Rules are numbered sequentially beginning with the prefix OR.

8 The Nacha Operating Guidelines provide ACH participants with implementation guidelines for the Nacha Operating Rules . Refer to the Guidelines for participant roles and responsibilities within the ACH Network and an overview of the various Standard Entry Class (SEC) Codes. In addition, the Nacha Operating Guidelines offer details on the legal framework of the Rules , Third-Party Service Providers, OFAC compliance, the National System of Fines, arbitration and compensation, and mapping ACH formats. Guidelines for rule changes that become effective later in the year are included where appropriate. This document also provides a brief history of the development of the ACH Network and a list of references relevant to the ACH Network and its participants.

9 Pages in the Nacha Operating Guidelines are numbered sequentially beginning with the prefix OG. A complete index of the Rules and Guidelines follows this section. Nacha Board of Directors Policy Statements Nacha Board of Directors Policy Statement on Data Security The following Data Security Policy Statement was originally adopted by the Board of Directors on November 13, 1986, and revised on June 9, 2010. Nacha strongly supports the efforts of ACH Network participants to implement state-of-the-art data security techniques. On an ongoing basis, ACH Network participants should stay abreast of new data security techniques and their applicability to the ACH Network to ensure a high level of quality and reliability to all users of the ACH Network.

10 Nacha Board of Directors Policy Statement on Fraud Prevention and Risk Management Initiatives The following Policy Statement on Fraud Prevention and Risk Management Initiatives was adopted by the Board of Directors on August 22, 2002. Fraud and various forms of financial abuse have found their way into every facet of the payment systems. The Nacha Board believes that the Automated Clearing House Network must maintain the highest standards of fraud prevention to retain the integrity of the payment mechanism and the trust and confidence of its users. Therefore, the Nacha Board resolves and strongly urges that all participants implement adequate control systems to detect and prevent fraud and abusive financial transactions.