FAQ: Upcoming Nacha Rules Changes

Q: What are the Nacha rules?  

The Nacha rules govern how ACH transactions are initiated, processed, and settled within the United States; they define participant responsibilities, standards, and procedures to ensure secure and efficient electronic payments. ABC Fitness, through its partnering financial institutions, is required to comply with these rules for all ACH transactions processed on behalf of our clients.

Q: Can I use my own bank verification solution?  

A: No – ABC Fitness’s Banking partners, known as Originating Depository Financial Institutions or ODFIs, hold ABC Fitness responsible for ensuring that all merchants are bound by the Nacha Rules, that authorization is obtained, and that all compliance obligations are satisfied.     

Q: Do All member bank accounts and ACH transactions need to be screened?  

A: No – These required processes and procedures do not require the screening of every ACH transaction individually.   

• ABC will verify all new members who add a bank account or existing members who update their bank account credentials.  

• For existing members, a previous successful ACH transaction is classified as a successfully verified bank account   

Q: Can I opt out of the risk and compliance changes?  

A: No. If you accept bank accounts, Nacha requires compliance. This includes account validation before initiating ACH and adherence to Nacha authorization and recordkeeping rules. ABC Fitness, as your Third-Party Service Provider (TPSP), will operate the risk-based monitoring program on your behalf to help manage fraud and returns, but you are still responsible for following Nacha guidelines in your own authorization and banking processes; opt-out isn’t permitted. 
   
Q: Are there penalties for non-compliance?  

A: Yes. Any entity found non-compliant, could be subject to a Nacha rules violation, which could result in penalties, including significant fines up to $500,000, and losing the ability to process bank account transactions.  

If you have questions or would like to discuss your specific needs, please contact us at [email protected].