Does Section 4-403 of UCC Apply to ACH?

Answered by:

Question:

Does Section 4-403 of the UCC apply to ACH? I have read and read the NACHA Rule for this and Reg E. They both say that you may.

Answer:

No. The "items" referred to in UCC 4-403 do not include ACH items, which are not instruments, or promises or orders to pay money. However, both Regulation E and NACHA have rules that provide for stop payments of transactions under their respective purviews. ACH debits that also meet the definition of preauthorized electronic fund transfers under Regulation E are subject to both the NACHA and Reg E requirements, and when there's a conflict between the two, the rule that is more protective of the consumer controls.

First published on BankersOnline.com 1/14/13.