Alberto, Beryl, Chris . . . we are officially one subtropical storm and two hurricanes into the 2018 Atlantic hurricane season, which means it is time for our semi-annual reminder about the Excused Delay provision of the NACHA Operating Rules.
This provision, found on page 3, Section 1.5, is intended to apply to processing delays caused by an interruption of communications or computer facilities that is out of the control of the financial institution, due to weather emergencies (“acts of God”) or war. This rule is not intended to excuse delays due to general failure of a financial institution’s or processor’s computer system or other equipment, which should be addressed in a contingency plan. It is important to note that financial institutions in geographic areas where extreme weather conditions are a routine seasonal occurrence should have business continuity plans that address those conditions and should not rely on the Excused Delay rule.
If your institution’s ability to process ACH returns is impacted by circumstances where Excused Delay would be applicable, once your system is operational you should originate your return transactions as you normally would. If you receive these returns back from the ODFI as dishonored returns bearing code R68, Untimely Return, then you should contest the Dishonored Return using code R73, Timely Original Return. If the ODFI contacts you for clarification, you should explain that you are using the Excused Delay provision of the NACHA Operating Rules. You may choose to proactively call the ODFI before sending the original return, but are not obligated under the Rules to do so.
You should contact ePayResources to get our assistance in communicating your need to invoke the Excused Delay provision to other financial institutions across the country. Such communication can help reduce the number of dishonored returns you receive. You should be aware that some ODFIs may not handle the Contested Dishonored Return correctly and may dishonor it again. This is not allowed under the NACHA Operating Rules, and you should contact us for assistance if this happens to you.
Does your organization have a robust business continuity plan that includes weather-related contingencies? When is the last time it was tested?