Continuing the evolution to electronic payments, the Federal Reserve Board has proposed new rules that would alter the timing of ACH transfers (automated clearinghouse). As the notice of proposed rulemaking explains, ACH debit transactions post at 11:00 a.m. (Eastern) and ACH credit transactions post at 8:30 a.m. (Eastern). The Federal Reserve Board previously delayed the posting of ACH debit transactions to allow receiving institutions time to obtain funds after the opening of the Reserve Banks’ Fedwire Funds Service. However, the Fedwire service now opens earlier, at 9:00 p.m. the previous evening. Therefore, the Federal Reserve Board has concluded that continuing the practice of delaying the settlement of ACH debit transactions until 11:00 a.m. is no longer necessary. Therefore, the new rule will move the posting of ACH debits to 8:30 a.m. (Eastern).
Clearly, changes to ACH posting times will have an impact on financial institutions and other businesses. Comments should be submitted by February 10, 2014.
Please contact Spilman or other knowledgeable counsel to discuss this change.