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Q.) A verbal stop payment is valid for 14 days, unless we receive a written confirmation from the member. On a check, written confirmation is valid for six months; isn’t it the same for a one-time ACH debit? If account holder wants to permanently stop an ACH item, how long do we have to keep the stop payment on our system? Two years has been our policy in the past.
A.)
The duration of a stop payment order confirmed in writing depends on whether it is for a debit to a consumer or non-consumer account. For debits to a consumer account, the Nacha Rules require the order to remain in place until the earlier of (i) the withdrawal of the stop payment order by the consumer, or (ii) the return of the debit entry (or for multiple debit entries relating to a specific authorization, the return of all such debit entries). In addition to the Nacha Rules, Regulation E contains stop payment requirements for recurring debits to consumer accounts. Comment 1005.10(c)-1 to Regulation E states that “[t]he financial institution must honor an oral stop-payment order made at least three business days before a scheduled debit. If the debit item is resubmitted, the institution must continue to honor the stop-payment order (for example, by suspending all subsequent payments to the payee-originator until the consumer notifies the institution that payments should resume).”
For debits to non-consumer accounts, the Nacha Rules require a stop payment order to remain in effect until the earliest of (i) the withdrawal of the stop payment order by the Receiver, (ii) the return of the debit Entry, or (iii) 6 months from the date of the stop payment order, unless it is renewed in writing. (Note that Nacha recently released a rules ballot (8-2021) to clarify that an RDFI may at its discretion establish a longer effective period for a stop payment on an entry to a non-consumer account if it chooses.)
(2021 ACH Rule Book, page OR51, RDFI Obligation to Stop Payment, Subsection 3.7)
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