Enhancements Adopted to NACHA Rulemaking Process
Status Report of Current Rules Initiatives
Background
NACHA reengineered and enhanced its Rulemaking Process (Process) in 2006 as part of its strategic planning to ensure a disciplined, well-defined, inclusive methodology that streamlined the Process and afforded industry stakeholders increased opportunities to contribute to the process. Changes included:
Providing the Rules & Operations Committee with an increased role in setting the strategic direction for the Process
Establishing a Member Rules Review Panel, Product Groups, and Industry Support Groups
Categorizing rules proposals to ensure expedient processing
The Rules and Operations Committee has reviewed and adopted several Rulemaking Process enhancements, intended to increase the overall efficiency of the Process.
Rulemaking Process Enhancements Summary
The Rules & Operations Committee approved the following enhancements:
Eliminate Category A Rules Work Groups
Reduce the number of required Voter calls
Reduce the number of other required calls
Enhance demographics with ACH Participant Surveys
Define procedures for reevaluation and reclassification
Create Category D (editorial) clarifications
A detailed explanation of each follows.
Eliminate Category A Rules Work Groups
Original Process
The Rules Work Group (RWG) for Category A proposals, created to allow participants not eligible to serve on other groups in the Rulemaking Process to provide comments on a proposal, has not been widely embraced. The largest Category A RWG has 8 members. Three of the Category A issues have no members in their RWGs.
Enhanced Process
Under the enhanced Process, there have been three opportunities to use a Category A RWG.
1. In the first (BOC), 3 of the 7 members of the RWG participated. No new issues were raised.
2. In the second (IAT), the RWG had no members.
3. In the third (Network Enforcement), 3 of the 6 members participated. At least one member of the RWG did not use the opportunity to provide comment on the proposal’s impact to the Network but misused the opportunity to voice personal opposition to the proposal.
Change
The Rules and Operations Committee agreed that Category A Rules Work Groups (RWG) appear to lend no beneficial input to the Process; and in the interest of creating efficiencies, will eliminate Rules Work Groups for Category A proposals. This does not impact groups for Category B or Category C issues.
Reduce the number of required Voter calls
Original Process
Under the current Process, calls are held with the Voters before a proposal goes out for comment or ballot, and during the comment/voting period (total of 4 calls during the development of a rule change). Staff has received the most beneficial input during the calls prior to distribution of an RFC and ballot. Voter participation on calls after distribution of RFCs or ballots is substantially lower. Furthermore, if any additional input is received during the ballot period, it can only be reviewed following the close of the ballot (i.e., the ballot can not be altered during the ballot period).
Change
To streamline the Process, pre-distribution calls (one call before RFC and one call before the ballot) with Voters will continue. Calls held during a comment or voting period are no longer required. Calls with the full voting membership or individual members will be held on an as-needed basis during either time period.
Reduce the number of other required calls
The pre-distribution calls (one call before RFC and one call before the ballot) for the ACH Operators and the Software Information Exchange (SIX) will continue. However, calls held during a comment or voting period are no longer required. Already scheduled monthly Operator calls will address issues as needed. In addition, calls occur on an as-requested basis during that time period with SIX.
Enhance demographics with ACH Participant Surveys
The demographics section of ACH Participant Surveys was re-structured and expanded in 2007 in an attempt to better understand the respondents’ points-of-view. This format was started with the Quality & Infrastructure survey. The Committee will continue to use this format in upcoming RFC surveys.
Define procedures for reevaluation and reclassification
On occasion, issues may require reclassification during the development of a rules proposal. For example, some issues may start as B issues (moderate impact to the Network) but become A issues (major impact to the Network) as they grow in complexity. The reverse may occur as well. The Product Group or Rules Work Group will be able to bring their issue back to the Rules & Operations Committee to request re-classification.
If an issue moves from A to B or B to A, the original work group will continue working on the proposal, as opposed to issuing a Call For Participants to create a new Work Group. The conversion of a B issue to an A issue may require the formation of an Industry Support Group.
Even though there is a difference in size of group for a Category A Product Group and a Category B Rules Work Group, in the scenario of re-classification, this requirement is waived so that the group does not change composition. The group will follow the Process flow for the new classification of the issue at the most relevant point in the Process. The issue should not be re-started, unless necessary, at the beginning of the Process.
If an A or B issue is re-classified as a Category C issue, it should move to the Category C Rules Work Group and into the Process flow at the most relevant point.
Create Category D (editorial) clarifications
Some Rules changes are purely editorial in nature. For example: 1) when an ACH Operator is not changing how it edits but needs a wording change in the Rules to properly address how the edit is already handled, 2) the recent change of language in the list of ineligible items for several check conversion applications (remotely created checks), and 3) the recent removal of a repetitive footnote in the returns format.
A fourth category in the Process has been created for clarifications that do not require an RFC or a ballot. If the Category C Rules Work Group believes an issue is editorial in nature, they can move the issue to the Member Rules Review Panel for review. The Panel will ensure that other parties do not need an opportunity to review and comment on the clarification.
The Rules & Operations Committee will approve all clarifications. This category will be used for clarifications only. Changes to the Rules will continue to require balloting of the membership.