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From Banking and Finance Law Daily, December 2, 2014

Fed Final Rule will allow earlier posting of overnight ACH transactions

By Colleen M. Svelnis, J.D.

The Federal Reserve Board has finalized changes to part II of the Federal Reserve Policy on Payment System Risk (PSR policy) that are designed to enhance the efficiency of the payment system. The Final Rule on the “Federal Reserve Policy on Payment System Risk; Procedures for Measuring Daylight Overdrafts” makes changes to the Fed’s procedures for posting overnight debit and credit entries to institutions’ Federal Reserve accounts for automated clearing house (ACH) debit and commercial check transactions. The changes to the PSR policy posting rules are intended to align them with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement.

The changes were adopted as originally proposed for comment (see Banking and Finance Law Daily, Dec. 2, 2013).

Changes adopted in the Final Rule include the following:

  • moving the posting of ACH debit transactions processed by the Federal Reserve Banks’ FedACH service overnight to 8:30 a.m. Eastern Time (ET) from 11:00 a.m. ET to align with the posting of ACH credit transactions.

  • moving the posting time for receiving most credits for deposits and debits for presentments to 8:30 a.m. ET for commercial check transactions; and

  • establishing two other posting times at 1:00 p.m. ET and 5:30 p.m. ET.

The posting rule changes for ACH debit and commercial check transactions will become effective July 23, 2015.

Regulation J Final Rule. The Board also adopted a Final Rule amending 12 C.F.R. Part 210, Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire). The changes will permit the Reserve Banks to obtain settlement from paying banks by as early as 8:30 a.m. ET for checks that the Reserve Banks present and to permit the Reserve Banks to require paying banks that receive presentment of checks from the Reserve Banks to make the proceeds of settlement for those checks available to the Reserve Banks as soon as 30 minutes after receipt of the checks.

The changes to Regulation J will become effective July 23, 2015.

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