2026 Nacha Compliance: The Rules, the Risks, and How to Prepare

What Treasury Leaders Need to Know

 

Nacha Overview

Businesses, government agencies, and individuals seeking a secure way to send or receive payments often rely on direct deposits and direct payments. In the United States, when these transactions involve bank or credit union accounts, they are processed through the Automated Clearing House (ACH) Network electronic payment system. The ACH Network is overseen by the National Automated Clearing House Association (Nacha), which is responsible for governing the system and providing risk management, education, and advisory services related to payments and ACH-related regulations.

What are the Nacha risk management basics that finance leaders should know?

 

Nacha’s Risk Management Framework

Nacha’s Risk Management Framework unites the ACH Network and the broader payments community in a collaborative effort to confront and mitigate fraud threats. Through the establishment of comprehensive rules and guidelines, tools, and recommended business practices, Nacha supports ongoing improvements in fraud detection and prevention. To dependably promote accurate and secure delivery of payments through the ACH Network, Nacha maintains a practice of regularly updating these regulations and operating rules.

 

The 2026 Nacha Rule Changes

In March of 2026, Nacha’s risk management rule amendments will take effect. To better prevent, detect, and respond to fraud, all ACH participants will be expected to implement risk-based fraud monitoring, expand ACH credit‑monitoring responsibilities, and adopt new controls such as standardized entry descriptions and updated return codes.

  

ACH Participants Impacted by Nacha Rules Changes

• All Originating Depository Financial Institutions (ODFIs)
• Large Originators (≥ 6 million ACH originations in 2023)
• Large Third‑Party Service Providers (TPSPs) with ≥ 6 million ACH originations
• Large Third‑Party Senders (TPSs) with ≥ 6 million ACH originations
• Large Receiving Depository Financial Institutions (RDFIs) for ACH credit monitoring only
• All remaining Originators, TPSPs, TPSs, and RDFIs

 

The Evolution of Nacha Risk Management Rules

Nacha risk management rules are designed to ensure security, accuracy, and strong consumer protection. They have evolved from early online-payment screening requirements to a comprehensive, network-wide risk management framework. To comply, financial institutions and businesses must follow strict standards for account validation, authorization, fraud prevention, and ongoing operational oversight. Key risk management compliance requirements include:

• Verifying and authorizing all accounts and transactions.
• Obtaining consumer consent for debit transactions.
• Encrypting and securely storing all banking information.
• Maintaining unauthorized return rates below Nacha’s 0.5% threshold.
• Implementing fraud and anomaly‑detection controls.
• Meeting fund-availability requirements, including next-business-day posting for ACH credits and same-day posting for Same Day ACH.
• Keeping contact details up to date in the ACH Contact Registry.
• Conducting annual audits to ensure adherence to Nacha operating rules.

Below is a snapshot of existing and upcoming Nacha rules and their effective dates.

The New Nacha Rule Amendments

Here’s a breakdown of how existing Nacha rules are being updated in 2026.

 

Fraud Monitoring & Credit Monitoring, Phases 1 and 2

Fraud Monitoring is a process (or processes) used to detect suspicious ACH entries. The 2026 Nacha fraud monitoring rule turns fraud detection from a once limited requirement into a full ACH-wide fraud‑risk management program. The old rule was narrow, requiring Originators to use a vague “commercially reasonable fraudulent transaction detection system” for only a small subset of debit transactions (e-commerce WEB debits and micro-entries). It provided no guidance or detail on what systems needed to include.

Credit monitoring shifts ACH risk management toward earlier detection and is meant to face credit-push fraud, one of the fastest‑growing and hardest‑to‑detect fraud types. Credit-push fraud often uses social engineering, phishing, or impersonation to make the transaction appear legitimate. Victims are tricked into authorizing payments under false pretenses and, because the transactions are technically authorized, traditional fraud controls have often failed. To detect fraud signals earlier, Nacha’s new amendment requires RDFIs to act during or immediately after payment receipt.

The new Nacha rules are broad, more specific (“risk-based processes and procedures”), and require all ACH participants to detect fraud using documented, reviewable procedures. For clarity, the below outline explains how the new and existing rules differ.

Depending on an organization’s ACH origination volume there are two fraud monitoring phases. Nacha is prioritizing larger high‑volume ACH participants for earlier compliance because they pose greater systemic risk. The phased approach also allows smaller or lower‑volume institutions extra time to implement fraud‑detection programs.

1. Phase 1, effective March 20, 2026, requires large Originators (≥ 6 million ACH originations in 2023), TPSPs, and TPSs to meet new monitoring obligations. ODFIs must implement enhanced fraud monitoring and large RDFIs must implement ACH credit‑monitoring controls.
2. Phase 2, effective June 19, 2026*, extends the same fraud monitoring requirements to all other Originators, TPSs, TPSPs, and RDFIs.

 ^{*Nacha has clarified that June 19, 2026 is a federal holiday so the practical compliance date is Monday, June 22, 2026.}

 

Company Entry Description

The Company Entry Description (CED) is a text field used by Originators to indicate the intent or purpose of an ACH transaction. Examples include “Payroll,” “Rent,” “Gas Bill,” “Dues,” etc. The CED supports risk management and fraud-detection logic at financial institutions. To improve fraud monitoring and more accurate transaction classification, Nacha is introducing standardized, mandatory descriptors of “PAYROLL” and “PURCHASE” for certain ACH transactions.

• PAYROLL is used for prearranged payment and deposit (PPD) credit entries that represent wages, salaries, or similar compensation. The PAYROLL description will help RDFIs identify multiple or redirected payroll deposits and support early‑availability logic.
• PURCHASE is used for e-commerce WEB debit entries for consumer purchases (including recurring purchases), and helps categorize and monitor online purchase activity for fraud‑prevention purposes.

 

New Definition of IAT

An International ACH Transaction (IAT or IAT Entry) has an updated definition to resolve industry confusion. Under Nacha rules, if any part of an ACH transaction flow involves a financial agency outside the U.S., it must be classified as an IAT. This includes if the sender’s or receiver’s bank is outside the U.S. or if the payment passes through a non-U.S. financial agency at any point. Correct identification of an IAT affects compliance with the Office of Foreign Assets Control (OFAC) screening, risk management, and operational handling, so Nacha’s more explicit definition should improve clarity and speed and reduce misclassifications of cross-border ACH transactions.

 

9:00 a.m. Funds Availability

To eliminate ambiguity and variability across banks, Nacha is requiring banks, credit unions, and institutions that receive ACH credit entries to make all non–Same Day ACH credits available by 9:00 a.m. local time on the settlement date - regardless of file delivery timing. This rule benefits consumers and employees who need timely access to funds (especially payroll that may be sent in evening batches).

 

Consequences of Nacha Noncompliance

Nacha enforces its operating rules through a structured system of fines, warnings, and escalated penalties designed to correct violations and protect the integrity of the ACH Network. Nacha rule noncompliance can lead to escalating fines (from hundreds to up to $500,000 per month for repeated or unresolved violations), suspension from originating ACH entries, operational disruption, and reputational damage with financial partners and customers.

 

Businesses Who Address These Rules Proactively Stand to Win

To reduce financial risk and remain compliant, organizations are understandably becoming more proactive when it comes to fraud prevention.

Larger enterprises and high-volume ACH originators are increasingly turning to cloud-based payment platforms to automate payee account verification, digitize workflows, and centralize payment issuance. Finance leaders appreciate and rely on such “future-proof” solutions because they can successfully counteract emerging fraud schemes, help them remain compliant with evolving regulatory standards, and position them to weather whatever threat or opportunity is next. By integrating advanced fraud prevention, monitoring, and configurable approval processes, payments automation solutions can also help businesses eliminate errors and delays that come with manual and fragmented systems. Some solutions can also integrate with banks and ERPs and be implemented quickly. In addition to automating compliance needs, these solutions can bring peace of mind, control, and operational success.

 

Next Steps for Finance Leaders to Address Nacha Compliance 

Here are some actionable steps to take if you’re unsure where your ACH payments processes – and Nacha-readiness – stand:

• Audit current ACH processes and fraud controls. Update compliance documentation and risk assessments.
• Schedule internal audits before each effective date.
• Update ACH templates and systems for new entry descriptions.
• Train staff on new risk management and fraud monitoring rules.
• Engage technology partners for automation and compliance readiness.
• Communicate changes to clients and partners where applicable.

 

Plus, use this Nacha Compliance Checklist.

Nacha Compliance Checklist by Effective Date (2026–2028)

 

Effective March 20, 2026

Fraud Monitoring, Phase 1: For non-consumer originators, TPSPs, TPSs, and RDFIs with ≥ 6 million ACH originations in 2023

• Develop risk-based fraud monitoring processes for ACH entries.
• Document procedures and establish annual review processes.
• Update internal policies to include “False Pretenses” fraud type.
• Train staff on new fraud detection requirements.

 

Effective June 19, 2026*

Fraud Monitoring, Phase 2: For remaining originators, ODFIs, and RDFIs

• Develop risk-based fraud monitoring processes for ACH entries.
• Document procedures and establish annual review processes.
• Update internal policies to include “False Pretenses” fraud type.
• Train staff on new fraud detection requirements.

 

Effective March 20, 2026

Company Entry Descriptions

• Update ACH templates to include:
  • “PAYROLL” for wage credit entries.
  • “PURCHASE” for consumer e-commerce debit entries.
• Test payment system updates for compliance.

 

Effective September 18, 2026

New Definition of International ACH Transactions (IATs)

• Review ACH classifications for International ACH Transactions.
• Update documentation and staff training.

 

Effective September 18, 2026

9:00 a.m. Funds Availability

• Adjust RDFI posting schedules to ensure funds are available by 9:00 a.m. local time on settlement date.
• Validate system changes for earlier availability.

 

Effective January 1, 2027

ACH Contact Registry for IAT Contacts

 

Effective March 19, 2027

IAT Enhancements

 

Effective March 17, 2028

New Return Reason Code – Sanctions Compliance  

^{(*Nacha has clarified that June 19, 2026 is a federal holiday so the practical compliance date is Monday, June 22, 2026.)}

 

With effective tools, Nacha compliance is not just a requirement - it helps reduce risk, improve operations, and protect your business.

Bottomline’s Payment Hub solution provides safeguards, monitoring, and automation that is Nacha-compliant.

Learn more about NACHA Compliance