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CUNA Regulatory Comment Call
November 24, 2008
NACHA Proposal On The Use Of Formatted Remittance Information For Certain ACH Payments
EXECUTIVE SUMMARY
- NACHA is proposing to amend the NACHA Operating Rules (Rules) to designate eXtensible Markup Language (XML) as a permissible format for payment related information in addenda records for certain ACH payments.
- The proposal would establish a code so that receiving depository financial institutions (RDFIs) could identify when XML-formatted addenda records are included with an ACH payment.
- Please submit your comments to CUNA by December 19, 2008. Comments are due to the NACHA by January 9, 2009.
Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop and to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may contact us at 800-356-9655, ext. 6732, if you would like a copy of the interim final rule. You may also access it here.
DISCUSSION OF PROPOSAL
- NACHA is proposing to amend the NACHA Operating Rules (Rules) to designate in eXtensible Markup Language (XML) as a NACHA sanctioned format for payment related information in addenda records for certain ACH payments.
- NACHA proposal would not define or select a specific information formatting standard, but would provide participants with another option for sending and receiving remittance information. Cuurrently, only data formatted in the ANSI ASC X-12, UN/EDIFACT or NACHA-endorsed banking convention standards are allowed.
- Although the proposal would allow the use of XML in certain transactions that are non business-to-business (B2B), NACHA expects that XML would occur predominantly in B2B transactions.
- The proposal would enable XML-formatted data for most Standard Entry Class (SEC) codes that permit addenda records carrying payment related information. Specifically, the following Standard Entry Class Codes would be available for XML transactions:
- ACH Payment Acknowledgment (ACK);
- Financial EDI Acknowledgment (ATX);
- Corporate Credit or Debit (CCD);
- Customer Initiated Entry (CIE);
- Corporate Trade Exchange (CTX);
- Prearranged Payment and Deposit Entry (PPD);
- Internet Initiated Entry (WEB);
- A new Addenda Type Code (06) would signify that the information included in the addenda record is formatted in XML.
- Currently, there are over 600 different types (schema) of XML that could be used for remittance data. This proposal would not specify or require the use of a particular schema of XML.
- The first five characters of the Payment Related Information field of the first addenda record (Positions 4-8) would be used by the Originator to identify the type (schema) of XML that follows.
QUESTIONS TO CONSIDER REGARDING THE SBA INTERIM FINAL RULE
- Do you support allowing XML-formatted payment-related information in ACH addenda records?
Yes ________ No ________
Please explain
- Would you support sending XML-formatted payment information with SEC codes for which only one addenda record is permitted (CCD, CIE, PPD, and WEB)?
Yes ________ No ________
Please explain
- NACHA’s proposal does not include the use of XML-formatted information for the DNE and ENR SEC codes because these are transactions limited to specific Federal government applications. Do you agree with this exclusion?
Yes ________ No ________
Please explain
- NACHA’s proposal does not include the use of XML-formatted information for the TRX SEC code because because it is limited to check truncation transactions carrying National Association of Check Safekeeping syntax. Do you agree with this exclusion?
Yes ________ No ________
Please explain
- The XML format takes significantly more space when building data files than the current SC X-12 formats. What do you believe would be the potential impact of processing significantly more addenda records to the Network?
Yes ________ No ________
Please explain
- Do you believe there is a threshold above which the number of records becomes a detriment to ACH processing, and any potential costs associated with increasing the ability to handle a larger number of addenda records?
Yes ________ No ________
Please explain
- Because XML-formatted information may be human-readable, it is possible that ACH addenda records carrying private information may be viewed by unintended third parties. Do you believe this would be problematic to credit unions?
Yes ________ No ________
Please explain
- Do you support an implementation date of March 19, 2010?
Yes ________ No ________
If not, what date would be more appropriate?
- Please provide any additional comments.
Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Lilly Thomas • Assistant General Counsel • (202) 508-6733 • lthomas@cuna.com
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 • lmartone@cuna.com
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