Payment Systems

NACHA Amendment Change for International ACH Transactions
As part of an ongoing effort to keep you aware of upcoming regulatory changes, WesCorp would like to remind you that effective September 18, 2009, an amendment to the NACHA Rules will require international ACH payments entering or existing the United States to be identified and formatted as an International ACH Transaction (IAT). These transactions will require OFAC checking on every IAT transaction received or originated by your financial institution.

The current formats for international payments—CBR and PBR—are not sufficient for allowing RDFIs to readily identify all parties to an international ACH payment in order to comply with OFAC policies.

The new IAT format will help RDFIs comply with your obligations under U.S. law by:

  • Carrying the additional data requirements included in the BSA’s “Travel Rule” as requested by OFAC.
  • Containing OFAC Screening Indicators to aid financial institutions in effective interdiction of unlawful transactions.

IAT will affect several areas within your credit union, including compliance, vendor management, operations, and member services. Non-compliance with the OFAC requirements can result in criminal penalties and can include fines ranging from $50,000 to $10 million and imprisonment from 10 to 30 years for willful violations.

We began testing receipt files with the FRB on Nov. 4, followed by origination file testing on Nov. 21. We have started the development phase of the reports, and continue to work with the FRB, NACHA and Payments association to facilitate accurate rule interpretation and requirements.

NACHA has put together several resources to assist you in preparing for the new NACHA rule amendment. NACHA’s IAT Survival Guide: Implementation, Best Practices and Technical Specifications is a helpful publication you might want to investigate.

WesCorp has been working closely with Western Payments Alliance and will soon be producing a series of webcasts in 2009 concerning IAT. We’ll notify you of the dates as soon as they become available. The first webcast will be in January 2009.

Here are two links for a template letter to send to your current ACH Data Processors, and an IAT Readiness Checklist. We hope these forms will aid you in preparing for the upcoming change in September. If you have any questions about IAT or the resources available to you, please contact our Member Call Center at (800) 772-2243 or e-mail a member representative to get started.

 

Purchase One Tip: Program Optimization
Every successful Purchasing Card program should be frequently evaluated by use of online reporting. Almost all Purchase One users already utilize the built-in online reports by scheduling the reports to run each cycle period. These reports are used to review critical card program metrics, such as spend-by-vendor, active card status, and the GL allocation of transactions.

But did you know there is a much more in-depth analysis available to active Purchase One users? Procura, LLC can now perform a “Card Program Optimization Analysis.” This analysis combines your recent P-Card and check data, cross references it with Visa and Works to show which vendors might accept P-Card, and then compares your data with common industry benchmarks. For example, it may reveal that your credit union captures 30 percent of office supply purchases on P-Card, where the industry benchmark states that 60 percent or more is the industry’s average capture rate. This is one of many examples of how this new view of your program may help uncover hidden growth potential. Procura, LLC will go one step further and assist by helping to develop a plan of action for converting any growth opportunities to P-Card.

To inquire about YOUR card program’s growth potential, contact Ian Gooch at Procura, LLC at (512) 524-5787 or e-mail him here. Look for the next Purchase One Tip in the April Words from WesCorp.