Financial Update (Second Quarter 2009)

FedACH Unveils Same-Day Service for Debit Transactions

ACH graphicThe Fed's automated clearinghouse (ACH) settlement will soon be more flexible. The Federal Reserve Banks recently announced plans to include in their settlement schedules an intraday service for certain ACH debits. The service will be restricted to consumer checks converted to ACH along with consumer debits generated from Internet and telephone transactions. With a planned rollout in the second quarter of 2010, this new service will not include consumer or corporate credits.

According to Minneapolis Fed president Gary Stern, who is also chairman of the Reserve Banks' Financial Services Policy Committee, "The same day service will provide for faster settlement of some ACH debit payments." Stern noted that the new service is consistent with the Fed's objective to support the continued efficiency and integrity of the U.S. retail payment system.

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This new same-day settlement will allow checks that are converted to ACH to be cleared and settled on schedules similar to those in place currently for the Fed's Check 21 image exchange services. The new accelerated service will also help financial institutions identify potentially fraudulent transactions more quickly and take corrective action sooner.

April 21, 2009