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11 Aug

Ready or NACHA… Here Third Party Sender Registration Comes

Ready or NACHA… Here Third Party Sender Registration Comes

Are you an Originating Depository Financial Institution (ODFI) and are you ready for NACHA’s new requirements?  Along with Phase 2 of same day ACH effective September 15, 2017, ODFI’s have to start registering Third Party Senders, or provide the National Automated Clearing House Association (NACHA) with a statement that the ODFI does not have any Third Party Senders effective September 29, 2017.  ODFI’s will have through March 1, 2018 for their initial Third Party Sender registration.

Initial Registration is to include the following:

  • The ODFI’s name and contact information
  • The Third Party Sender’s name and location
  • Routing numbers used in ACH transactions originated for the Third Party Sender
  • The Company Identification of the Third Party Sender

ODFI’s are to provide initial registration within 30 days of originating their first ACH entry for the Third Party Sender.  If the ODFI did not know they have a Third Party Sender, they will have a 10 day grace period since identification to register them with NACHA.  ODFIs are also required to update registered information on Third Party Senders within 45 days following change in information, including termination of Third Party Sender.

Along with Third Party Sender registration, ODFIs are also responsible to obtain information for Third Party Senders that are direct customers of the first Third Party Sender, known as a “nested” Third Party Sender.  Third Party Senders are required to provide their ODFIs with any registration information needed for nested Third Party Senders in which they transmit ACH entries for.

NACHA may also ask ODFI’s for supplemental information in which ODFIs are required to provide the information within 10 business days. If the ODFI does not respond to NACHA’s request, they will be subject to enforcement rules.  The following information may be requested by NACHA:

  • DBA names, Tax ID, street and website address of Third Party Senders
  • Name and contact information for Third Party Senders,
  • Names and title of Third Party Sender principals
  • Approximate number of originations which Third Party Senders will transmit the entries
  • Statement whether Third Party Sender transmits credit, debits or both

Registration of Third Party Senders will promote consistent CDD among all ODFIs and will help NACHA identify which Third Party Senders use multiple ODFIs. It will also identify when a Third Party Sender is terminated by one ODFI and subsequently registered by another.

Third Party Sender registration is less only 3 months away, as an ODFI are you ready? Article written by Natalie Reifsneider.