Federal Reserve Requests Comment on Modifications Supporting Enhancements to Same Day ACH
Deadline: July 15, 2019
This announcement was released May 9, 2019, at FederalReserve.gov.
The Federal Reserve Board on Thursday requested comment on potential modifications to the Federal Reserve Banks' National Settlement Service (NSS) and Fedwire® Funds Service to support enhancements to the same-day automated clearinghouse (ACH) service. The Board also requested comment on corresponding changes to the Federal Reserve Policy on Payment System Risk related to a new posting time for transactions and an increased daylight overdraft fee.
On September 13, 2018, NACHA, the rules and standards body for the ACH network, announced that its voting members had approved amendments to the NACHA Operating Rules & Guidelines to establish a third same-day ACH processing and settlement window. Currently, there is a morning window with a submission deadline of 10:30 a.m. ET and settlement at 1:00 p.m. ET and an afternoon window with a submission deadline of 2:45 p.m. ET and settlement at 5:00 p.m. ET. The new window, with a submission deadline of 4:45 p.m. ET and settlement at 6:00 p.m. ET, would allow originating depository financial institutions to submit same-day items later in the business day. A third same-day ACH window aligns with the Federal Reserve's ongoing objective to support improvements in the safety and efficiency of payment systems in the United States as well as public interest in greater availability of payment services. In particular, the later same-day ACH window would allow more institutions to use same-day ACH services during a greater portion of their business day and may promote greater adoption of same-day ACH and availability of the service to originators and end-users.
The NACHA rules changes require adjustments to Federal Reserve services so that the private-sector ACH operator, The Clearing House, can settle same-day ACH transactions later in the day via the NSS. These changes include:
- Extending the closing of NSS by one hour to 6:30 p.m. ET
- Extending the cutoff time for Reserve Bank accountholders to initiate transfers on behalf of third parties via the Fedwire Funds Service (Fedwire Funds third-party cutoff) by 45 minutes to 6:45 p.m. ET
- Extending the closing of the Fedwire Funds Service by 30 minutes to 7:00 p.m. ET.