Browse Prior Art Database

Automated Clearing House News - First Quarter 1987 Disclosure Number: IPCOM000243636D
Original Publication Date: 1987-Jan-01
Included in the Prior Art Database: 2015-Oct-07

Publishing Venue



ACH newsletter from 1987

This text was extracted from a PDF file.
This is the abbreviated version, containing approximately 22% of the total text.

Page 01 of 4

Automated Clearing House News

First Quarter 1987

New York Automated Clearing House 100 Broad Street
New York, N.Y. 10004
(212) 612-9200

Three NYACH member banks apply for NACHA membership under old rules

Chemical Bank, Citibank and Manufacturers Hanover were among a group of major banks across the country who acted before a rules change in December, to apply to form their own ACH associations as members of the National Auto- mated Clearing House Association (NACHA). All three banks indicated that they were maintaining their active member- ship in the New York Automated Clearing House (NYACH).

"These banks are confirming their continued leadership roles in the ACH and, further, pursuing the opportunity to have a vote on the NACHA board/' commented William M. Walsh, NYACH senior vice president and director of data processing.

Edward A. O'Neal, Jr., executive vice president of Chemical Bank, emphasized the bank's position in a December 23 letter to New York Clearing House executive vice president John F. Lee. "You may rest assured," the letter stated, "that we have every intention of continuing our relationship in processing with the New York Clearing House and of being completely supportive of the NYACH ... ''

Until January 1, 1987, any two banks could form an ACH association and apply for NACHA membership for a $25,000 fee. The two banks could be part of the same holding com- pany. The new rules require that an entity applying to be an ACH association member must have membership that in- cludes 10 or more independent federally insured depository institutions not owned by the same holding company. The initial membership fee was raised to $100,000.

If all new applications are approved, NACHA will have 42 ACH association members.
(see " Speaking of NYACH" on second page)

Fed proposes procedures to limit risk

ACH risk management is on the front burner for discussion and comment by ACH users across the country. Theim- petus is a set of proposals of the Federal Reserve Board of Governors, released in December, that would affect a vari- ety of payment mechanisms, including the posting of ACH items for purposes of monitoring daylight overdrafts.

The public comment period has been extended to April 6, 1987, and the Board's staff recommends implementation of the final program beginning in the fourth quarter of this year.

"Our Clearing House institutions are now evaluating the Fed proposals very carefully/ ' noted William M. Walsh, NYACH senior vice president and director of data processing. "Many of the issues are very complex, since they impact the Fed's ap- proach to ex-post monitoring and daylight overdraft control."

Issues raised by the Fed for public comment include:

., Ex-post monitoring procedure changes: ACH credit transactions would continue to be posted to the ex-post system at the opening of business. ACH debit transactions and check transactions would be posted at 1 p.m. Eastern Time.

Real-time monitoring procedure improvements...