International ACH Transaction (IAT) 2009 Readiness Survey Results

On September 18, 2009, the new IAT Standard Entry Class (SEC) code will replace NACHA’s Consumer Cross-Border (PBR) and Corporate Cross-Border (CBR) SEC codes for international ACH transactions. This change will allow institutions to better identify international ACH transactions and help them comply with Office of Foreign Assets Control (OFAC) requirements.

In an effort to help measure industry-wide awareness of the IAT SEC code and readiness for implementation, the Federal Reserve Banks conducted a survey in March 2009. Most of respondents were financial institutions based in the U.S. Over half were community banks. This effort was a follow-up to a similar survey conducted in 2008.

Survey participants represented a variety of institution type and asset sizes. A summary of responses is shown below.

How knowledgeable are you about the new International ACH Transaction (IAT) SEC code?

Overall, 21% of survey respondents consider themselves knowledgeable about IAT SEC codes. This is just slightly larger this year, compared to last year (21% in 2009 versus 18% in 2008).

Institution Type Extremely and Very Somewhat Not Very and Not At All
Regional Commercial Bank 56% 34% 10%
Community or Savings Bank 10% 50% 39%
Credit Union 11% 49% 40%
Other 20% 47% 53%

How knowledgeable are you about your institution’s roles and responsibilities (for example, internal operations and compliance, OFAC procedures) associated with sending and/or receiving IAT items?

More of those surveyed this year (28% in 2009 versus 18% in 2008) consider themselves knowledgeable about their organization’s roles and responsibilities (such as OFAC) associated with sending and receiving IAT items.

Institution Type Extremely and Very Somewhat Not Very and Not At All
Regional Commercial Bank 61% 28% 11%
Community or Savings Bank 19% 56% 25%
Credit Union 21% 57% 21%
Other 29% 51% 20%

When do you expect that your organization will be ready to process IAT payments?

Nearly all (93%) of those surveyed expect to be ready to process IAT payments by September 2009 or before.

Institution Type Prior to the September, 2009 Effective Date In Time for the September, 2009 Effective Date We Have Concerns About Being Ready for the September, 2009 Effective Date
Regional Commercial Bank 27% 68% 5%
Community or Savings Bank 28% 67% 4%
Credit Union 33% 57% 10%
Other 50% 50% 0%

For each of the following, please indicate which steps your organization has already taken and those it expects to take for the IAT.

Nearly two-thirds (64%) of those surveyed have read the new NACHA rules and/or attended an educational or training session, been in contact with their ACH software vendor about the new code or begun discussions with their compliance officer about receiving IAT items.

Steps to Prepare for IAT Already Taken Expect to Take
Read the new NACHA rules and format 64% 34%
Attended an educational teleseminar or training session 57% 40%
Have been in contact with our ACH software vendor about the new code 56% 33%
Began discussions with our compliance officer about receiving IAT items 53% 39%
Contacted our RPA for assistance 35% 45%
Have been in contact with other software vendors about integrating the new code 34% 24%
Conducted an internal planning/training session 26% 65%
Began discussion with our originating customers about the new required data fields 14% 51%

Have you contacted your customers about their readiness to receive or send IAT-formatted items?

Most (73%) of those surveyed have not yet contacted customers about readiness to receive or send IAT-formatted items.

Institution Type Yes No Unsure
Regional Commercial Bank 15% 66% 19%
Community or Savings Bank 8% 79% 13%
Credit Union 23% 62% 15%
Other 0% 100% 0%

For more information about IAT, please visit our resource center.

 

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