Nacha’s ACH Rules Change
Nacha, the association that governs the Automated Clearing House (ACH) network, is making some important ACH rule changes that focus on making your ACH transactions even safer. The new rules affect how you use ACH in two ways:
- Company Entry Descriptions
- Fraud Monitoring
Let’s start with the simpler change, first: Company Entry Descriptions. Nacha is standardizing the Company Entry Descriptions with two new categories to help reduce the risk of fraud. These categories are PAYROLL and PURCHASE. Payroll will be used for, you guessed it, payroll. Wages, salaries, and similar compensation all fall under the new payroll description. Purchase will be used for any e-commerce purchase which includes online goods and recurring online payments. More information can be found on Nacha’s site, here.
The new Fraud Monitoring rules require all ACH originators, the ones who initiate an ACH payment, Third Party Service Provider (TPSP), Third Party Sender (TPS), and Originating Depository Financial Institution (ODFI) to implement fraud monitoring processes and procedures. The above parties will also be responsible for maintaining these fraud monitoring processes and procedures and reviewing them on an annual basis. Most organizations likely already have practices in place to reduce fraud, but this new rule ensures it. More information on the Fraud Monitoring changes can be found on Nacha’s site, here.
FAQs – Nacha’s New ACH Rules
That changes depending on the rule and your volume of ACH transactions. The rules go into effect on the following dates:
- March 20, 2026: Company Entry Description
- March 20, 2026: Fraud Monitoring for all ODFI’s, non-Consumer originators, TPSP’s, and TPS’s with annual origination volume of 6 million or greater in 2023 (Phase 1)
- June 19, 2026: Fraud Monitoring for all other non-Consumer Originators, TPSP’s, and TPS’s (Phase 2)
If you’re unsure which part of the Fraud Monitoring phase you belong in, if you adhere to the rules starting on March 20, 2026, you’ll be set.
Short answer: yes. If you originate any ACH transaction, you will have to adhere to the new rules by March 20 or June 19, 2026.
The long answer can be found on Nacha’s website which you can visit by clicking here.
Not exactly. The rules call for a risk-based approach allowing you to enact processes and procedures in a manner you see fit. You can dedicate more resources to higher-risk areas and transactions, which you and your company can determine. This, however, does not mean you can simply ignore anything deemed “low-risk.”
Yes. This is a mandatory change and must be implemented no later than March 20, 2026 for all ACH Originators.
Both the Company Entry Description and Fraud Monitoring rules are being put in place to help reduce fraud. With standardized language across the ACH network, anomalies will be easier to spot which makes preventing fraud easier. This is especially important given the rise of fraud year after year.
Our Treasury Management team is available to help answer any other questions you may have about the Nacha ACH Rule Changes and they can be reached by emailing JMBTreasury.