ACH Network Administration Fees─Background
In accordance with the NACHA Operating Rules, each Participating Depository Financial Institution (DFI) that transmits or receives ACH entries is required to pay to NACHA an annual fee and a per-entry fee for costs associated with the administration of the ACH Network. The fee amounts are set to recover costs of the ACH Network administrative functions performed by NACHA for the industry on an “at-cost” basis. The fee amounts are reviewed and approved by the NACHA Board of Directors annually and are amended as the Board deems necessary.
The ACH Operators collect the (1) annual fees, and (2) per-entry fees for entries sent from one Participating DFI to another Participating DFI through the ACH Operators, on NACHA’s behalf.
NACHA collects directly the per-entry fees for ACH entries not sent through the ACH Operators, but that are sent as part of direct send arrangements. A direct send arrangement is one in which a Participating DFI sends a payment file that uses the NACHA formats, and/or is covered by the NACHA Operating Rules, to another non-affiliated Participating DFI, not through an ACH Operator. This definition applies regardless of how interbank settlement is accomplished.
Participating DFIs with direct send volume exceeding 5 million entries annually are obligated to file the requisite reporting with NACHA quarterly. Participating DFIs with direct send volume below this threshold are obligated to file with NACHA annually. Reporting requirements for direct send volume are included in Form N-7 (2009) and will be included in Form N-7 (2010) referenced later in this document.
Purpose of the Fees
Annual Fee
Through the annual fee, all Participating DFIs that use the ACH Network equally contribute a minimum amount to maintain the NACHA Operating Rules. The Rules provide the legal and operational foundation for the ACH Network. Activities encompassed by the NACHA Rule Making Process include the development and management of rule proposals, Requests for Comment, rule balloting, Rules interpretations and ACH Operations Bulletins, as well as Rules-related customer services and the administration of the Rules & Operations Committee and its subgroups.
Per-Entry Fee
Through the per-entry fee, all Participating DFIs contribute proportionally based upon their use of the ACH Network. Per-entry fee proceeds are used to recover the costs of ACH Network activities associated with risk management, quality improvement, research and development of ACH applications and Rules, statistics, communications, and advocacy, as well as the administration of the national ACH marketing campaign and the net costs of the Rules enforcement process. The per-entry fee is applied to all commercial and government ACH entries transmitted or received by Participating DFIs, with the exception of “on-us” entries.
2010 ACH Network Administration Fees
A multi-year transition for NACHA to achieve full recovery of the costs it incurs for the administration of the ACH Network – at an “at-cost” basis – has been planned since 2007. NACHA has under-recovered these costs from 2007 through 2009. Based on the 2010 fee schedule, NACHA will fully recover the costs it will incur for ACH Network administration for the first time in 2010.
Annual Fee
The annual fee for calendar year 2010 increases from $54.00 to $96.00, representing a monthly increase of $3.50 per Participating DFI over the 2009 fee amount.
One of the benefits of direct membership to NACHA is the ability to vote and have a representative voice on the NACHA Operating Rules. The weighting of this benefit for the purposes of the 2010 Weighted Rules Vote Schedule has been adjusted to reflect the transition to a full cost recovery for the administration of the ACH Network in 2010.
ACH volume or usage of the Network remains as the principal component for weighting. Full cost recovery enables the recognition of the equal funding of the NACHA Operating Rules by all financial institutions through the annual fee in the weighting in 2010, while preserving existing checks and balances. Based on current information, this will result in a January 1st, 2010 adjustment of the weighted voting of the Regional Payments Associations as a Member Class from 46% to 50%, and that of the Direct FI Members as a Member Class from 54% to 50%.
Per-Entry Fee
Financial institutions are reminded that the per-entry fee, set by the Board of Directors in July 2008 at $ .000133, takes effect as of October 1, 2009 in conjunction with the availability of six digit billing capabilities by the ACH Operators[1]. There will be no change to the per-entry fee amount in 2010; it will remain at $ .000133 for the upcoming calendar year.
NACHA will publish the 2010 Schedule of ACH Network Administration Fees and Form N-7 (2010) for direct send volume reporting on October 1, 2009 in the ACH Rules area of http://www.nacha.org.
[1] Refer to the NACHA Members Memo dated September 24, 2008, “2009 ACH Network Administration Fees.”
Staff Contacts
Please contact the following NACHA staff with questions regarding the 2010 ACH Network Administration Fees:
Scott Lang, AAP
Senior Vice President, Association Relations
Anne Andrews, AAP, CCM
Senior Director & Group Manager, Membership Development