I. INTRODUCTION As part of its Payment System Risk Policy, the Federal Reserve Board has announced posting rules for a new same-day automated clearing house (ACH) service. The Reserve Banks’ FedACH Same Day service, which will include certain debit transactions, will be available only to customers who elect to participate.
II. FRB ACH SAME DAY SERVICES
The Reserve Banks began offering an opt-in, same-day settlement service for certain ACH debit payments through the FedACH service effective August 2, 2010. FedACH customers may opt-in to this service by completing a participation agreement. As part of the agreement, depository institutions may choose the extent of their participation: they may send only, receive only, or send and receive same-day debit items. This service will be limited to transactions arising from consumer checks converted to ACH and consumer debit transfers initiated over the Internet and phone.
Institutions that choose to use this service should be aware of the posting times (the time by which a transaction will be recorded for daylight overdraft purposes and reflected in an institution’s daylight overdraft balance) and associated settlement times established for same-day forward and return transfers, as these times could influence how participating institutions manage their Federal Reserve accounts, especially late in the day. Settlement for the transaction will occur approximately 15 to 30 minutes before the associated posting time and will be reflected in the institution’s account balance.
The following table outlines the transmission deadlines and associated posting times through the FedACH Same Day service.
FedACH Same Day opt-in service
Transmission deadline to FedACH
Posting time
Forward same-day debit transfers
*2:00 p.m. EST
*5:00 p.m. EST
Return same-day debit transfers
*4:30 p.m. EST
*5:30 p.m. EST
* All times associated with the deadlines and posting rules are Eastern Standard Time.
Depository institutions may send a same-day forward item to FedACH until 2:00 p.m. EST. FedACH will process these forward items and send them to the receiving institutions by approximately 4:00 p.m. EST, and these items will settle the same day at 5:00 p.m. EST.
Depository institutions will have until 4:30 p.m. EST to return same-day debit items for same-day settlement. FedACH will process and send the returned items to the originating institutions by approximately 5:00 p.m. EST, and these items will settle the same day at 5:30 p.m. EST. The Board believes that because these processing and posting times provide institutions with information sufficiently in advance of the close of Fedwire, participants in the FedACH Same Day service will be able to react appropriately to any debit transfers they may receive in their Federal Reserve accounts.
Today, under certain circumstances, FedACH customers may request an extension to the transmission deadline of 2:00 p.m. EST for immediate-settlement transactions. Immediate-settlement transactions include ACH return items and check-truncation items. The posting time for these items is 5:00 p.m. EST. While customers will not be able to request an extension to the FedACH Same Day service, the transmission deadline for this service may be minimally affected by extensions granted for the immediate-settlement transactions. If a customer is granted an extension, FedACH would extend both the transmission deadline to send immediate-settlement return payments and the transmission deadline to send same-day forward items past 2:00 p.m. EST. While this extension would grant all FedACH customers more time to send these items, it would not delay the posting times as FedACH would absorb the extension by shortening its processing window.