- within Law Department Performance, Criminal Law and Accounting and Audit topic(s)
On March 19, 2021, NACHA, the governing body of the Automated Clearing House (ACH) Network, will implement the Web Debit Account Validation rule aimed at reducing fraud through a meaningful modernization of the ACH system.
The new rule, which requires all businesses to validate a consumer's bank account information when initiating a single or recurring ACH withdrawal/debit, is leaving many businesses with questions on how to implement a compliant and cost effective validation system prior to the one-year enforcement safe harbor period expiring March 19, 2022.
As businesses begin evaluating the options to become compliant with the modernization rules, including using a third-party service provider, the attorneys of Buchanan Ingersoll & Rooney are available to help. Our Financial Services and Banking team can help businesses understand the rule changes, anticipate future changes, and help businesses protect themselves and their clients by:
- Evaluating current electronic payment processes involving ACH Debits and advising on compliance with the pending and future NACHA modernization rules.
- Negotiating vendor contracts with third party providers of account validation services and developing an implementation plan compliant with existing regulations, including the Fair Credit Reporting Act.
- Reviewing the existing data protection, privacy, recordkeeping, audit and authorization policies to ensure they meet/exceed NACHA audit requirements.
Originally Published by Buchanan Ingersoll, March 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
