The Federal Reserve Board approved modifications to the Federal Reserve Banks' National Settlement Service and Fedwire Funds Service to support enhancements to the same-day automated clearinghouse service, called same-day ACH.
Nacha, the ACH network's rules and standards body, amended its operating rules and guidelines on Sept. 13, 2018, to establish a third and later same-day ACH processing and settlement window. The modifications align with the Federal Reserve's ongoing objective to support improved speed and efficiency of the payment system in the U.S. as well as public interest in greater availability of payment services. The later same-day ACH window would allow more institutions to use the services during a greater portion of their business day.
The Fed has approved the modifications and enhancements to be implemented in March 2021, which would accommodate Nacha's current effective date for implementing the later same-day ACH window of March 19, 2021.
In addition, the regulator also approved changes intended to reduce the risk that the modified service closings and cutoffs would increase the frequency of delays to the reopening of the Fedwire Funds Service and approved corresponding changes to the Federal Reserve Policy on Payment System Risk related to a new posting time for transactions and an increased daylight overdraft fee.
The Reserve Banks will increase the threshold for granting extensions to the Fedwire Funds Service closing time to $3 billion from $1 billion. With consultation with the Fed, the Reserve Bank will determine whether further increases to the threshold are needed to maintain the regular and consistent open of the Fedwire Funds Service at 9 p.m. ET.
The Board is amending part of the Payment System Risk policy to make conforming changes to the daylight overdraft fee calculation, to add a new 6 p.m. ET posting time for same-day ACH transactions and remove the current 5:30 p.m. ET posting time for ACH return transactions.