DFI to DFI Messaging Concepts

Concept Origin In 2014 NACHA released an RFI asking the industry about possible expanded uses for addenda information More than 80% of respondents indicated that the electronic format should be used for passing information between participants to support the rules Examples of information requested and supplied: Written Statements of Unauthorized Debit Proof of Authorization Source Documents or other supporting information Request for Return The current processes for obtaining this information are manual and time consuming

Business Case The current manual processes indicated the following consequences of handling requests: Inability to ensure the receipt of a request Therefore, jeopardizing the ability to expect timely response and effecting, in some instances, the ability to act upon customer inquiries Increased cost of ACH exception processing Duplicate/Non-response processes established in ACH operation areas

Business Case The NACHA Operating Rules require that financial institutions respond to inquires for copies of required records within ten banking days: Proof of Authorization Converted check copies Written statement of Unauthorized Debit

Additional Uses for Messaging In addition to sending and receiving copies of requests for documents required under the Rules, respondents to the RFI indicated that the ACH message framework could be used for: Requests for an ODFI return Additional information related to an Originator Status Messages Other innovative uses for non-monetary messaging ISO messages

DFI to DFI Messaging Requirements Utilizing the ACH network for sending requests must result in the following benefits: Known timeframe of receipt Ability to pass request downstream Consistent process/ubiquity Ability to handle request pertaining to multiple Entries with ease Acceptance by regulators/auditors Security Mandatory response – negative or positive

Repository Both Operators are in favor of the concept of an Operator provided repository for the secure storage and access of documents shared between DFIs. Responder would upload document and Requestor would access. Included link or reassociation number

Exception processes Responses are needed in the solution for misrouted requests A mandatory response will be required for any response that is sent This will assist in shortening the manual tracking for all requests Currently being logged in a mandatory fashion