Southern Financial Exchange e-news
March 31, 2021

SFE News Link Contents:

  • SFE Member Community Bank Empowers Smart Decisions through Inclusive Financial Education Program
  • Keep Steady in a Shifting Payments Environment
  • Challenges and Changes in Financial Inclusion and Empowerment
  • SNAP Continues to Pop
  • Third-Party Sender Tool Updated
  • Why Banks Should Maintain Their Digital Initiatives After the Pandemic
  • All Fedline Solutions Users Must Complete the Assurance Program, Materials Sent This Week
  • Critical Details on the June ACH Rules Changes

The Latest News in Payments

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SFE Member Community Bank Empowers Smart Decisions through Inclusive Financial Education Program

When Judy Long, President and COO of First Citizens National Bank (FirstCNB), and her husband Roger started planning for retirement, they had a lot of questions. This inspired Judy to generate conversations around financial literacy in her community. FirstCNB launched Smart Women in 2018, and the program now reaches people – women and men – of all demographics across and beyond Tennessee.

“It all started from personal experience,” Judy begins. “We needed to know how to prepare for retirement, and we saw that it’s a complicated process.” She recognized that, if a pair of knowledgeable business and banking professionals had questions about financial planning, there must be a critical education gap.

FirstCNB’s Smart Women Program “is designed to empower women, through education, to feel confident making difficult financial decisions,” according to the welcoming blog on the Smart Women page.

Seventy-two women joined the premiere event discussing Social Security at McIver’s Grant Public Library in Dyersburg, Tennessee. Smart Women’s speakers and writers have since covered a broad range of topics – fraud, power of attorney, credit scores, debt management, starting a business, and more.

Early on, Smart Women partnered with the American Library Association and assembled advisory boards of women who are well connected, influential leaders in their community. The board members are chosen to represent the diverse population Smart Women serves. These moves ensure the program is open to and speaks to as many people as possible.

Judy explains, “There is no single demographic who needs [financial] education more than another. We wanted the program to be diverse. Inclusion is very important to us. Libraries are open to everybody and known as centers of education.”

“This is my passion.” You can feel Judy’s energy when she speaks about Smart Women and everyone in the program. In her speech at the American Bankers Association conference, she tells the audience, “We have made an immediate impact in the community and across Tennessee. We have given life-changing results to women and to men through education.”

Judy believes it is her role and the role of her fellow bankers to welcome and educate their community on the many financial situations a person goes through in their lifetime. “Your banker can be your most trusted advisor. We should continue to listen to our clients and market, to understand what they need.”

Since moving to virtual platforms, FirstCNB has seen Smart Women reach audiences past Tennessee state lines. As it is their mission to help people of all ages and demographics to make smart financial decisions, this only motivates Judy and the program leaders to keep going. Anyone interested in learning more about FirstCNB’s programs can visit the webpages for Smart Women and Banzai (financial education for children).

We would like to offer a special thank you to Janiece Wright and Judy Long for speaking to us about First Citizens National Bank’s financial education efforts and allowing us to share with our members. Your work is invaluable.

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Keep Steady in a Shifting
Payments Environment

Join industry experts and fellow professionals at Digital Directions to learn about important industry trends and changes!

May 4-6, 2021
Virtual Conference

There are always new trends to follow, but the many cultural shifts that happened in the last year have significantly affected payments and how you need to work with your customers or members.

Leaders joining us at Digital Directions will be putting an emphasis on new and upcoming payment options, consumer trends, risk mitigation, and operational changes to consider. Their insights will help your institution better handle the shifting environment. You can view the full roster of speakers and agenda here.

Take advantage of this year's 3-for-1 pricing and the early bird discount - register yourself and two team members today!

Glance at the 2021 Sessions

Warranty Breaches and Unauthorized Checks (Pre-Conference Workshop - These workshops are INCLUDED in your registration this year!)
Dal Bolt, NCP, AAP

What warranties are made when checks are exchanged and presented, and what are the obligations of each party to the exchange? What do you do when a warranty is breached? What do you do when unauthorized checks pay? This session will help you understand who warrants what to whom, and help you navigate the thorny issues of warranty breaches and unauthorized checks.

Changing Payments in a Changing World (Keynote Address)
Rich Oliver
Independent Payments Consultant
Retired EVP, Federal Reserve Atlanta

Rich will discuss the nature of change that is taking place, egged on by the pandemic and other externalities that facilitate the success and growth of certain new payment approaches.

The Generational Gap in Payments: How Big is it?
Claire Greene
Payments Risk Expert
Retail Payments Risk Forum
Federal Reserve Bank of Atlanta

Young and old use cash (at least prior to the pandemic); old and young use cards. What are the differences across generations? This session will include the latest data from the Federal Reserve's nationally representative Survey and Diary of Consumer Payment Choice.

How to Redefine Retail Banking
Ali Ayca
Senior Vice President
Head of Sales, Retail Banking
First Horizon

During this session we will talk about current and future state of retail banking driven by client behaviors. We will analyze some of the key trends in retail banking and how to redefine retail banking based on clients’ financial needs.

Register Now for Early Bird Pricing*

Members (FIs, Affiliates & Corporations) - $370
Non-Members - $470
Corporations Without Referral - $525
*The pricing above ends April 23rd.

SFE Education Club = 15 Points

Visit the Conference Website

Challenges and Changes in Financial
Inclusion and Empowerment

March 22, 2021 | Author: Scarlett Heinbuch |

Not so long ago, women faced limitations on their financial freedoms in areas we take for granted today. Opening a bank account, obtaining a credit card, or acquiring a mortgage or business loan in their own names was restricted. The norms of the day fostered inconsistent practices that left many women financially disadvantaged, disempowered, and dependent on a male relative. Fortunately, things are different today. Women are now drivers in the payments seat, making more than 90 percent of household purchases.

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SNAP Continues to Pop

March 29, 2021 | Author: David Lott |

Over the last year, a number of our Take on Payments posts have expressed industry concerns about the impact that the major shift to digital payments propelled by the COVID-19 pandemic will have on the un- and underbanked population. While several governmental assistance programs have modified their programs to accommodate remote enrollment and ongoing participation, the actual use of these benefit funds was largely limited to in-store purchases of foods, drugs, and other items authorized by those programs. My colleague Catherine Thaliath authored a post last July reviewing how the Supplemental Nutrition Assistance Program (SNAP) had moved from a one-state, pilot program in 2019 to supporting online purchases by SNAP cardholders in six states by early 2020.

Read More

Third-Party Sender Tool Updated

Tool Helps FIs Understand Roll as Intermediary

When a transaction involves the use of a payment intermediary (e.g., a Third-Party Service Provider that performs some aspect of payment processing on behalf of a client), those ACH roles may not always be easily identifiable. That’s why Nacha developed and recently updated the Third-Party Sender Identification Tool. It helps financial institutions and their ACH customers understand their roles when an intermediary is involved in some aspect of ACH payment processing.

Learn More

Why Banks Should Maintain Their
Digital Initiatives After the Pandemic

March 26, 2021 |

The pandemic has served as the biggest financial industry crisis since the 2008 recession, with social distancing guidelines, stay-at-home orders and the economic fallout, forming a triple threat that has rocked the sector. Thousands of bank branches across the U.S. have closed temporarily or permanently while others have limited their hours or switched to appointment-only models to reduce the risk of infection.

Digital-First Banking

The best post-pandemic plans for banks will likely be to continue the paths they have charted during the pandemic, as many customers will be doing the same. Recent research found that 87 percent of customers who stepped up their use of digital channels during the pandemic are planning to continue doing so once the crisis ends. Bank customers are also likely to continue using smartphone-based payment methods after the pandemic, even though many began using such solutions to avoid the risk of COVID-19 infection from handling cash. Another report found that 420 billion transactions — worth approximately $7 trillion — will shift from cash to digital payments by 2023 and projected this number to swell to $48 trillion by 2030.

Read More

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All Fedline Solutions Users
Must Complete the Assurance Program, Materials Sent This Week

This week, your institution should be receiving attestation materials regarding the Federal Reserve Banks’ Security and Resiliency Assurance Program (“Assurance Program”). This program will serve as an additional wall of defense against the evolving threats in the payments space.

According to the Federal Reserve Banks’ website, “The email containing materials will come from the sender name “Assurance Program” and from the sending domain Please know that this is a legitimate email from the Federal Reserve Banks. We will notify organizations via email once all attestation packets have been distributed.”

What You Need to Know

  • All institutions that use the FedLine Solutions must:
    • Conduct an assessment of their compliance with the Federal Reserve Banks’ FedLine security requirements
    • Submit an attestation that they have completed the assessment
  • Deadline: Organizations will have until December 31, 2021 to complete the program (though SFE encourages our members to complete the program as soon as possible to avoid last-minute stress).
  • All FIs and service providers will be expected to complete the Assurance Program annually.
  • An email outlining the program, expectations and guidance was sent to every organization’s End User Authorization Contact(s) (EUACs) in January 2021.
  • All institutions are encouraged to coordinate with their compliance department to integrate the Assurance Program into broader compliance and audit efforts.


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Critical Details on the
June ACH Rules Changes

The cascade of ACH Rules changes continues with three critical updates, all effective June 30, 2021. These changes directly affect financial institutions, ACH Originators, Third-Party Senders, and Third-Party Service Providers. Ensure you understand what your team needs to do to remain in compliance with the Nacha Rules and what your TPSs and TPSPs need to know by carefully reviewing the details from Nacha below. If you have any questions, our staff at SFE is here to help. 

Supplementing Data Security Requirements

Large, non-FI Originators, Third-Party Service Providers (TPSPs) and Third-Party Senders (TPSs) will be required to protect deposit account information by rendering it unreadable when it is stored electronically. This rule first applies to Originators and TPSPs (including TPSs) with an ACH volume of 6 million transactions or greater annually, effective June 30, 2021. For Originators and TPSPs (including TPSs) with an ACH volume of more than 2 million transactions annually, this rule will be effective June 30, 2022.

  • A TPSP or TPS must consider the combined volume of entries processed for all of its various clients when determining if it meets the annual 6 million/2 million volume thresholds.
  • The Rules are neutral as to the methods/technologies that may be used to render data unreadable while stored at rest electronically. Options include:
    • Encryption
    • Truncation
    • Tokenization
    • Destruction
    • Having the financial institution store, host, or tokenize the account numbers
  • Non-FI Originators, TPSs, and TPSPs that meet the annual origination/transmission volume threshold in calendar year 2020 or beyond will be required to comply with this rule by June 30 of the year following the calendar year in which the threshold was met.
  • This Rule applies to paper authorizations or other documents containing ACH account numbers scanned for electronic records.

More Information

Limitation on Warranty Claims

Under this new rule, an RDFI will be allowed a specific length of time to make a claim against an ODFI’s authorization warranty. For an entry to a non-consumer account, the RDFI has up to one year from the settlement date of the entry. For an entry to a consumer account, the limit will cover two time periods – the first 95 days, or, if outside the first 95 days, the RDFI has two years from the settlement date of the entry.

  • These time frames apply to all warranty claims moving forward, no matter the settlement date of the Entry.
  • An RDFI could be liable to its customer without the ability to collect from the ODFI.
  • A timely warranty claim does not guarantee the return of funds. An ODFI may still make a defense to deny an RDFI’s claim.
  • This new rule does not affect an RDFI’s obligations to its account holder with respect to handling an unauthorized debit to the Receiver’s account. Financial institutions should consult their own legal counsel regarding their obligations to their Receivers under the Nacha Operating Rules and other applicable legal requirements.

More Information

Reversals and Enforcement

While the Enforcement rule went into effect on January 1, 2021, the Reversals rule will be effective June 30, 2021. The Reversals rule expands permissible reasons for a reversal to include a “wrong date” error, establishes formatting requirements for reversals, and permits RDFIs to return improper reversals. This will help clarify when Originators, TPSs, and ODFIs should not initiate reversals, and the rule will give RDFIs an efficient means of handling improper reversals through the ACH return process.

  • An Originator or ODFI may initiate a reversal for a “wrong date” error – when it has transmitted a debit Entry that orders payment on a date earlier than intended, or when it has transmitted a credit Entry that orders payment on a date later than intended. (This is in addition to existing reasons, such as duplicate entries, etc.)
  • This rule will establish formatting requirements for reversals, beyond the current standardized use of the Company Entry Description field (“REVERSAL”):
    • The Company ID, SEC Code, and Amount fields of the reversal must be identical to the original entry.
    • The contents of other fields may be modified only to the extent necessary to facilitate proper processing of the reversal.
  • An RDFI may return an improper Reversal.
    • R11 for consumer accounts, 60-day return timeframe upon receiving a consumer claim
    • R17 for non-consumer accounts, 2-day return timeframe
    • R17 to return an improper Reversal that an RDFI identifies on its own (i.e., not based on a customer contact), 2-day return timeframe

More Information

Please call us here at SFE with any questions you may have regarding these changes - reach out at or (504) 525-6779. We are here to be your payments resource. For a full review of this year's changes, order the "What's New in Payments 2021" on-demand webinar.

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