Payment Alert

Suspension of Implementation Date of Rule on Formatting Convention for Consumer Initiated Entries

Issued and Effective: September 19, 2007

For Distribution to Participating Depository Financial Institutions

SUMMARY
This ACH Operations Bulletin announces the suspension of the implementation date of September 21, 2007 for an amendment to the NACHA Operating Rules that would establish a formatting convention for use of the Individual Identification Number Field when CIE Entries are used for online consumer Federal tax payments. The suspension is effective for a period not to exceed one year - September 19, 2008.

DISCUSSION
The voting membership of NACHA approved a ballot on August 14, 2007 that would amend the NACHA Operating Rules to establish a formatting convention for use of the Individual Identification Number Field when CIE Entries are used for online consumer Federal tax payments. The rule change was intended to assist the Federal government in the posting of tax payments.

The amendment was issued in NACHA's Supplement #2-2007 to the 2007 ACH Rules within the section "Issues with Minor Impact to the Network (Category C) Rule Pages."

On September 14, 2007 NACHA received a letter from the U.S. Financial Management Service (FMS) requesting that NACHA suspend the implementation date of the rule amendment. FMS states that the Electronic Federal Tax Payment System has not been programmed to accept the format, and that any CIE Entries it receives would be returned. FMS would like additional study and evaluation prior to the implementation of a formatting convention.

Pursuant to its authority in the Rules¹, the NACHA Board of Directors has suspended the implementation date of September 21, 2007 for a period not to exceed one year. NACHA and FMS will be working together in the interim to recommend whether this amendment will be re-instated, revised or repealed.

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¹ The Rules empower the Board to "approve, suspend, or change the implementation date of a rule if it determines such action is in the best interests of the National Association and its members." (Article 13, Section 13.2, Page OR 39).