Electronic Data Interchange

Article excerpt

Evolving electronic payments rules focus IBAA's efforts


Issue: Consumer Advisory Council consideration of financial restructuring legislation, finance charges, Community Reinvestment Act performance and consumer awareness of the electronic payment system. Note: IBAA is the only national trade association that regularly, three times a year, comments on the council's meeting agenda.

Agency: Federal Reserve.

IBAA Comments:

Urged the council to discuss pending legislation on financial restructuring due to detrimental consequences the legislation would have for consumers, senior citizens and small businesses;

Noted any change to finance charges must be weighed against the additional compliance costs to conform to revisions. Recommended finance charges be limited to the costs associated with the principal balance of a loan, fees associated with structuring the loan or with the collateral that should be disclosed separately;

Urged that large multistate banks be properly assessed on their Community Reinvestment Act performance. Emphasized that regulators must ensure individual branches are not used to drain deposits from local communities; and,

Recommended that the Federal Reserve play an active role in educating consumers as the federal government moves to an electronic payment system. Strongly urged the Federal Reserve to expand Fedline services to include financial electronic data interchange translation capability.


Issue: Proposal to require receiving banks to provide, upon the receiver's request, all payment-related information contained within the addenda records of all ACH entries. This payment-related information is known as Financial Electronic Data Interchange or FEDI.

Agency: National Automated Clearing House Association.

IBAA Position:

Recognized the need for NACHA to modify rules to provide for the translation and delivery of this payment-related information to customers, in light of the federal government's mandate to make all of its payments (except tax refunds) electronically by Jan. 1,1999;

Voiced concern that most community banks currently lack FEDI translation capabilities. Recently, IBAA requested the Federal Reserve to expand Fedline to include low-cost FEDI translation services;

Urged NACHA to support our request to the Federal Reserve and take an active role in educating community banks on all aspects of FEDI; and,

Recommended extending an alternative implementation date three months to June 1998.


Issue: Proposal to allow commercial depositors and their financial institutions to collect via the Automated Clearing House network checks returned for insufficient or uncollected funds. …