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Fed approves changes to support Same-Day ACH enhancements
The Federal Reserve Board has approved modifications to the Federal Reserve Banks' National Settlement Service (NSS) and Fedwire Funds Service to support enhancements to the same-day automated clearinghouse (ACH) service; changes intended to reduce the risk that the modified service closings and cutoffs would increase the frequency of delays to the reopening of the Fedwire Funds Service; and corresponding changes to the Federal Reserve Policy on Payment System Risk related to a new posting time for transactions and an increased daylight overdraft fee.
The Board has approved the following modifications and enhancements to be implemented March 19, 2021, which would accommodate Nacha's current effective date of March 19, 2021, for implementing the later same-day ACH window:
- The National Settlement Service will close at 6:30 p.m. ET, one hour later than its current closing at 5:30 p.m. ET. The opening time for the National Settlement Service will remain at 7:30 a.m. ET.
- The Fedwire Funds Service will close at 7:00 p.m. ET, 30 minutes later than its current cutoff at 6:30 p.m. ET. The Fedwire Funds third-party cutoff will occur at 6:45 p.m. ET, 45 minutes later than its current cutoff at 6:00 p.m. ET. The opening time for the Fedwire Funds Service will remain at 9 p.m. ET on the previous calendar day.
- The Reserve Banks will modify their current practice of maintaining a two-hour window between the closing and the reopening of the Fedwire Funds Service to maintain only a 90-minute window.
- The Reserve Banks will raise the threshold for granting extensions to the Fedwire Funds Service closing time from $1 billion to $3 billion. The Reserve Banks, in consultation with the Board, will determine whether further increases to the threshold are warranted to maintain the regular and consistent opening of the Fedwire Funds Service at 9:00 p.m. ET.
- The Board is amending part II of the PSR policy to add a new 6:00 p.m. ET posting time for same-day ACH transactions, remove the current 5:30 p.m. ET posting time for ACH return transactions, and make conforming changes to the daylight overdraft fee calculation.