Magazine article American Banker

Check ACH Group Continues Effort to Mesh Formats

Magazine article American Banker

Check ACH Group Continues Effort to Mesh Formats

Article excerpt

ORLANDO -- Though the Check ACH Coalition has abandoned its plan to create a new payments system linking image exchange networks and the automated clearing house system, its members are still working to make the two formats more compatible.

Three coalition members said Tuesday during a presentation at the Bank Administration Institute's 2007 TransPay conference here that the group is considering legal and regulatory approaches to smoothing out the differences between the two payment formats.

They said that legal obstacles and technological hurdles played a significant role in their decision last month to drop plans to test the proposed payments system, along with growing evidence of widespread industry adoption of image exchange, which could have made such a system largely unnecessary.

"We do believe there still is a problem to be solved," John G. Feldman Jr., a senior vice president at Bank of America Corp., said during the presentation.

Mr. Feldman, representing the large banking companies that started the coalition, was joined by Viveca Y. Ware, the director of payments policy at the Independent Community Bankers of America, representing smaller banks, and Brad Ganey, the director of item processing at Southwest Corporate Credit Union in Plano, Tex., representing credit unions. The Check ACH Coalition was formally introduced to banks' check-operations executives at the same conference last year.

The goal of the project was to enable banks that are using image technology to settle checks electronically with those that are not by routing payments data across the ACH network.

Mr. Feldman said that check and ACH systems are converging, with checks being converted into ACH transactions at the corporate lockbox, the point of purchase, and, beginning next month, in merchants' back offices.

The coalition had wanted to develop its new clearing system using Regulation CC, which covers checks, rather than the ACH-governing Reg E. …

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