Blogs

The Federal Reserve Bank (FRB) on October 9^th and Nacha on October 14^th announced rule and regulatory updates that could impact your organization. Leading up to these announcements, both the FRB (in 2024) and Nacha (in 2024–2025) released Requests for Comment (RFCs) and Requests for Information (RFIs) to gather feedback. EPCOR also hosted Special Industry Update webinars to collect member feedback, and we submitted responses to both the FRB and Nacha on behalf of our members.

Let’s review each of these potential changes and how you can incorporate them into your strategic planning ahead of their proposed or expected effective dates.

Federal Reserve Bank

• Regulatory Change: Fedwire^® and National Settlement Service (NSS) expansion to Sundays and weekday holidays
  • When: Expected no earlier than 2028 (originally proposed for two years after ISO 20022 implementation for Fedwire^®).
  • Impacts: Affects financial institutions that process wire transfers via the Fedwire^® Funds Service and those handling ACH or checks through private clearinghouses via NSS. Participation in this expansion will be optional.
  • Specifics: Fedwire^® and NSS will operate Sunday through Friday, including weekday holidays. Fedwire^® will be available for 22 hours (9:00 PM to 7:00 PM ET), and NSS will operate for 21.5 hours (9:00 PM to 6:30 PM ET).
  • Future possibilities: The FRB will monitor demand for potential future expansion to seven days per week, including Saturdays and possibly weekend holidays. If pursued, the FRB will seek public comment through a new proposal.

You can read the full Federal Reserve Bank press release for complete details on these updates.

Nacha

• Rule Change: Funds Availability Requirements for Non-Same Day Credit Entries
  • When: Effective September 18, 2026
  • Impacts: Applies to all financial institutions processing ACH transactions. Based on submitted comments, many institutions were already making funds available for ACH items received after 5:00 PM local time by 9:00 AM on the next banking day.
  • Specifics: Subsection 3.3.1.1 of the ACH Rules outlines funds availability based on when non–Same Day credit entries are received by the RDFI. Previously, entries received by the ACH Operator before 5:00 PM local time were available by 9:00 AM on the settlement date, while those received after 5:00 PM were available by the end of the settlement date. The new Rules remove the 5:00 PM cutoff, requiring all non–Same Day credit entries to be available by 9:00 AM local time.

• Rule Change: Definition of International ACH Transaction (IAT) Entries
  • When: Effective September 18, 2026
  • Impacts: Applies to all financial institutions processing ACH transactions. The change is intended to clarify the definition of an IAT, rather than to prevent misidentification of transactions as IATs.
  • Specifics: Updates the IAT definition in Section 8.55 of the ACH Rules to now read as follows:
    • An Entry that is the U.S. ACH Network component of an international payment transaction.
    • For purposes of this definition, an international payment transaction is a transfer of funds or monetary value that (a) originates with, transits through, or is delivered to an account at an office of a financial agency located outside of the U.S., or (b) otherwise is received from a sender or delivered to a receiver, in each case, via a facility of a financial agency located outside of the U.S.
    • For purposes of this definition, financial agency means an entity that is authorized by applicable Legal Requirements to provide financial asset accounts, including deposits, or to conduct the business of issuing general purpose payment instruments or transferring funds or other monetary value for third parties.
    • An IAT Entry cannot be a Same Day Entry. 

• Rule Change: Registration of IAT Contacts in the ACH Contact Registry
  • When:  Effective January 1, 2027
  • Impacts: Affects all financial institutions processing ACH transactions, as they will now need to add an IAT contact in addition to the existing ACH operations and fraud/risk management contacts required under Section 1.14 of the ACH Rules.
  • Specifics: Financial institutions must register their “IAT-handling contact,” providing the name, title, email and phone number for at least one primary and one secondary contact or department contact, ensuring each includes a working email and telephone number.

• Rule Change: Optional Date of Birth Field for IAT Entries
  • When: Effective March 19, 2027
  • Impacts: Applies to all financial institutions processing ACH transactions. The third and seventh IAT addenda records, currently reserved in character positions 74–83, will be used for this optional field. System updates may be required to send and receive the revised IAT format, and policies and procedures may need to be updated to incorporate the use of the Date of Birth field.
  • Specifics: The Date of Birth field will use 10 characters within positions 73-83 of the third and seventh IAT addenda records. Its inclusion is optional but may aid in research and processing of IAT entries, while aligning with new Financial Action Task Force (FATF) standards and potential future updates to the Bank Secrecy Act (BSA) Travel Rules for cross-border transactions. 

• Rule Change: Non-FI Foreign Agencies in IAT Entries
  • When: Effective March 19, 2027
  • Impacts: Applies to all financial institutions processing ACH transactions. The IAT format has been expanded to include non-U.S. financial agencies that are not traditional account-holding institutions. For example, some international telecom companies that offer mobile money transfer and payment services would fall under this definition.
  • Specifics: The Receiving/Originating DFI and Foreign Correspondent Bank Identification Number Qualifier fields for 03 – IBAN will be removed, and a “Non-Bank Foreign Financial Agency Identifier” will be added alongside the existing 01 – National Clearing System Number and 02 – BIC Code (SWIFT Code). Additionally, the Foreign Correspondent Bank, Originating DFI and Receiving DFI Branch Country Code/Identification/Name fields will be expanded to include generic references to non-bank foreign financial agencies and clarify field usage for inbound and pass-through IAT entries. 

• Rule Change: New Return Reason Code for Sanctions Compliance Obligations
  • When: Effective March 17, 2028
  • Impacts: Applies to all financial institutions processing ACH transactions. The R16 return reason code will revert to indicate only “account frozen” (removing “entry returned per Office of Foreign Assets Control (OFAC) instruction”), while a new R90 code will handle “sanctions obligations,” reflecting the RDFI’s actions to ensure compliance. These changes may affect systems, policies and procedures.
  • Specifics: The R90 – “Entry Returned Due to RDFI’s Sanctions Compliance Obligations” return reason code will be added, with a return timeframe of “within two banking days from the RDFI’s sanctions compliance determination.” R16 will revert to “Account Frozen,” defined as “access to the account is restricted due to specific action taken by the RDFI or by legal action,” including compliance with OFAC.

View Nacha’s press release for more detailed information on these ACH Rules changes.

Stay tuned for future content offerings from EPCOR, where we’ll dive deeper into these changes and discuss their potential impacts on your institution’s operations. You can register for our 4^th Quarter EPCOR Industry Update webinar on October 21^st and our Quarterly Compliance & Review – 4^th Quarter webinar on November 18^th for further discussion with our industry experts. For more detailed information on Nacha’s new Rules and the Federal Reserve’s updates, you can visit Nacha’s website and the Federal Reserve Bank’s full announcement.