FedACH^® Services

Information is power! Tips to boost your compliance power.

July 2012

When you choose the Federal Reserve’s FedACH Services to process your automated clearing house (ACH) transactions, you enable a whole host of value-added information services that transform raw data into valuable information to help you manage your ACH business and meet your compliance obligations. The questions and tips listed below illustrate how our FedACH Information Services tools match up with some of the NACHA^® rules and guidelines established for effective risk management.

 

Power source

Q: Does your institution want to monitor originators’ or third-party senders’ origination activity across multiple settlement dates or network connections?

• The FedACH Risk^® Origination Monitoring Service will help to set debit and/or credit origination caps across multiple processing days regardless of network entry point or ACH software.
• The Origination Monitoring Analyzer in the FedInvent tool can help with determining appropriate cap values by using data from the Search for Batch screens in FedACH Information Services to model historical patterns of origination.

 Q: Does your institution want to monitor exposure limits for originators of WEB entries?

• The FedPayments^® Reporter Service (formerly named the FedEDI^® Plus Service) is your tool to automatically generate a monthly volume summary by SEC code for individual originators as determined by company ID.
• FedACH Information Services provides current information on originator activity by SEC code by using the Search for Batch screens.

Q: Does your institution want help complying with the NACHA rule associated with providing originators with notification of change (NOC) information?

• Use the FedPayments Reporter Service NOC Report to automatically convert and deliver this information directly to originators.

Q: Does your institution want to respond to receivers’ requests for payment addenda electronic data interchange (EDI) information?

• The FedPayments Reporter Service Remittance Advice Summary and Detail Reports will help you automatically deliver the information in a human-readable format to receivers. These same reports can deliver payment-related information to health care providers for the increasing number of health care payments flowing through the ACH network.
• The FedPayments Reporter Service Payment Data Information File is available to provide receivers who have EDI or NACHA-compatible accounts receivable systems with a straight-through processing option.
• The FedPayments Reporter Service Social Security Beneficiary Report will help extended care facilities match benefit payments to beneficiaries.

Q: Does your institution want to help its ACH operations area know when to initiate the requirements associated with the death of a receiver of federal government benefit payments?

• The automatically-generated FedPayments Reporter Service Death Notification Report is the tool to help meet this need.

Q: Does your institution want help understanding, and providing originators with, information associated with returned items?

• The FedPayments Reporter Service Return Item Report helps you, as the originating depository financial institution (ODFI), convert information into a human-readable format for each return or operator-rejected item received, and you can automatically deliver this information to your originators.
• The FedACH Risk Returns Reporting Service lets ODFIs easily review unauthorized and invalid ACH returns based on a threshold of returns received by originator. The report generated shows all originators that exceed the designated threshold in order to help ODFIs determine where origination practices can be improved.

Q: Does your institution want help meeting the NACHA rules requirement associated with monitoring originators’ return rates, sometimes referred to as the one percent returns rule?

• The FedPayments Reporter Service Return Ratio Report will monitor the percentage of an originator’s transactions that are returned. This report can be generated automatically on a daily or monthly basis for individual originators as specified by their assigned company ID(s). It shows dollar and entry counts in total and by SEC codes and the percent of debit forward monetary items returned.

Q: Does your institution want help identifying international ACH transactions (IAT) in order to comply with OFAC requirements associated with these transactions?

• The automatically-generated FedPayments Reporter Service IAT Report creates information to help operations staff identify and understand these transactions in order to perform the associated due diligence.
• The FedACH Risk^® RDFI Alert Service can notify you of incoming IAT items as soon as they are transmitted by FedACH.
• The IAT Outsort File option can segregate these international transactions for additional compliance processes without delaying the majority of incoming ACH payments.

 

Everyone wants information - Tips to super charge your risk management efforts

While NACHA may develop the most specific ACH monitoring rules and guidelines, its directives are not the only drivers behind the need for information on ACH transactions.

Would your institution like to receive automatic alerts if a large WEB debit is coming into a receiver’s account? How about if a corporate customer is anxiously awaiting a payment and would like notification of its receipt?  What if a debit carrying an erroneous extra zero will impact your end-of-day position or your Fed account? If you answered yes to any of these questions, the informational notification criteria that can be established with the FedACH Risk RDFI Alert Service is for you.

How about information your board of directors wants to see? The FedPayments Reporter Service Routing Number Activity Report might help with that. It provides the most recent month and year-to-date summary level information for originated and/or received transactions processed via FedACH Services for the specified ABA.

What about auditors? Do you ever struggle to respond to their requests for information? Many of the reports discussed above may help verify the strength of your risk management efforts. And, even if you have not set up all the useful FedPayments Reporter Service reports to be generated on an automated basis, you can create most reports on an ad hoc basis to answer that occasional auditor question.

 

Need more information?

Be prepared. Let the value-added capabilities of FedACH Information Services help provide you with compliance power. Find out more today by visiting the FedACH section of FRBservices.org or use the My FedDirectory^® Service to find contacts, such as account executives and FedACH sales specialists, specific to your institution.

"NACHA" is a registered trademark of NACHA—The Electronic Payments Association.

Top of Page