Navigating Nacha: Key Rule Changes Ahead

4/7/2025 - By Sallie O'Brien, AAP, APRP

As the world of electronic payments continues to evolve, staying informed about Nacha’s rule changes is critical for financial institutions and businesses. The recent "Navigating Nacha" webinar, hosted by Saltmarsh Financial Institutions Consulting, provided valuable insights into past, current, and upcoming changes to the Nacha Operating Rules.

Senior Consultant Sallie O’Brien, AAP, APRP, walked attendees through key modifications that impact ACH transactions, focusing on fraud prevention, compliance updates, and procedural clarifications. Here’s a breakdown of the most significant changes you need to know.

A Look Back: Updates from 2024

Several changes from 2024 set the stage for the rules coming into effect in 2025 and beyond. These include:

Clarification of WEB Entries – All consumer-to-consumer credit transactions must now be classified under the WEB SEC Code, regardless of how the payment instruction is communicated.
Expanded Definition of an Originator – This update clarifies that the originator must have direct authorization from the receiver before initiating an ACH transaction.
Notification of Change (NOC) Discretion – Originators now have the flexibility to decide whether to implement NOC changes for single-entry ACH transactions, reducing unnecessary administrative work.
Data Security Requirements – Once an entity reaches the threshold requiring data protection measures, it must continue implementing those safeguards even if its ACH volume later falls below that level.
Prenotification Entries Update – Originators can now send prenotes for revalidating account details at any time, not just before the first transaction.
Expanded Use of Return Reason Code R17 – This amendment allows RDFIs to return transactions suspected of fraud under the "QUESTIONABLE" category, helping mitigate fraudulent activity.

2025 Rule Changes: Strengthening Security & Compliance

Starting April 1, 2025, Nacha will introduce key updates aimed at enhancing fraud detection and recovery:

Expanded Use of ODFI Request for Return (R06) – ODFIs can now request an RDFI to return a credit entry for any reason, including suspected fraud. While RDFIs are not obligated to comply, they must respond to the request within 10 banking days.
Additional Funds Availability Exceptions – RDFIs can delay funds availability if they suspect a credit entry is fraudulent or unauthorized, giving them more time for investigation.
Written Statement of Unauthorized Debit (WSUD) Timing – Consumers can sign a WSUD before a debit is posted to their account, allowing RDFIs to process unauthorized transaction claims more efficiently.
RDFI Return Timeframe for Unauthorized Debits – RDFIs must now return an unauthorized debit within six banking days of receiving a completed WSUD, ensuring quicker action against fraudulent debits.

Looking Ahead: 2026 and Beyond

The 2026 rule changes focus on fraud monitoring, transaction transparency, and enhanced security measures. Two of the most significant updates include:

Company Entry Descriptions for Payroll & Purchase Transactions (March 20, 2026)

ODFIs must ensure that the Company Entry Description field contains "PAYROLL" when transactions involve wages or salaries.
The description "PURCHASE" must be used for e-commerce debit entries authorized by consumers.

Fraud & Credit Monitoring Enhancements

Fraud Monitoring Requirements for Originators & ODFIs (March 20 & June 22, 2026): ODFIs, Third-Party Service Providers (TPSPs), and Third-Party Senders (TPSs) must establish and annually review risk-based fraud monitoring procedures.
ACH Credit Monitoring by RDFIs (March 20 & June 22, 2026): All RDFIs must implement processes to identify unauthorized or suspicious credit entries and respond accordingly.

What These Changes Mean for Financial Institutions

The evolving Nacha rules emphasize fraud prevention, compliance, and operational efficiency. Financial institutions and businesses should:

Update internal processes to align with the new return and monitoring requirements.
Train staff and originators on how to properly classify transactions using new SEC codes and company entry descriptions.
Enhance fraud detection capabilities by implementing robust monitoring systems and dual control measures.
Communicate with clients and partners to ensure smooth adoption of the changes.

Final Thoughts

As ACH payments continue to grow in volume and complexity, these Nacha rule changes serve to improve security, reduce fraud risks, and streamline operations. Staying proactive in understanding and implementing these updates will help financial institutions and businesses navigate the evolving payments landscape with confidence.

For more information on how these changes impact your organization, reach out to the Saltmarsh Financial Institutions Consulting team. Their expertise can help ensure compliance and optimize ACH operations for the future.

Need Expert Guidance? Saltmarsh’s Financial Institutions Consulting team specializes in Nacha compliance audits, risk assessments, and ACH training. Contact us today to stay ahead of regulatory changes and strengthen your payment processing strategies.