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Your 2nd Quarter ACH
Newsletter from ALACHA
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An Ounce of Prevention - Data Security
by Leslie P. Mitchell, Director, Network Risk Policy
NACHA - The Electronic Payments Association
The headlines are familiar: ChoicePoint, CardSystems, dozens of University systems and, most recently, TJX. Data Breach events have brought the payments system face to face with risks ranging from financial loss to reputational damage. Historically, the ACH Network has been relatively free from such public pummeling. So why are data breaches and their attendant security issues a primary concern for the Network? We spoke with NACHA members, staff, and outside consultants to provide a high-level view of the Network's perspective on data breach risks and the proactive steps that any organization holding customer payments data in trust can undertake.
"Be Prepared" may be the Scout's motto but it's also a fitting mantra for data security around payments records. Rising fraud across the range of payments products and channels gives all stakeholders reason to be on the alert. No matter what the nature of the incident - from a one-off, unauthorized use of a credit card to a coordinated attempt to commit identity theft on a grand scale - fraud inevitably stems from unauthorized access to customer data, including account numbers and other personal details.
NACHA's Internet Council, with its focus on e-transactions, is at the forefront of discussions around data security in the ACH Network. Fred Laing, Chairman of the Internet Council Steering Committee and President of UMACHA, points to the February Internet Council's meeting agenda, which included the economic impact of and preventative solutions for data breaches, as an indication of the industry's interest in this prominent topic. At the meeting, Joanne McNabb, Chief of the California Office of Privacy Protection, addressed the importance of investing in prevention and of understanding trends in data breach law. She also focused on establishing and retaining
customer trust through breach prevention.
McNabb introduced statistics, taken from studies conducted by Ponemon Institute, LLC, regarding consumer reaction to data breach events. Nearly 60% of respondents reported that a breach event in which their data had been compromised resulted in a decrease in trust of the company holding the data. Moreover, almost 20% of these customers terminated their relationship with the company. Study questions were posed in both 2005 and 2006 and a comparison shows that consumer concerns in this area are gathering strength.
The loss of current and prospective customers and overall damage to reputation tallies up to a significant financial impact. And over the long term, media coverage of data breach events could impact consumer confidence. The companies responding to the Ponemon study survey lost an average of $182 per breached record or $4.8 million per company. Overall costs to recover from a data breach increased 30 percent between 2005 and 2006.
Providing the type of education and information available from respected industry resources regarding the impact of breach events is a primary objective for the Internet Council. A number of tools and approaches are also under review, including the development of an organizational risk profile that could identify specific administrative, technical and physical controls to help protect sensitive or confidential information.
Today, the story of data breaches and their impact on the ACH remains a relatively brief tale. NACHA, through the efforts of groups such as the Internet Council, is spreading the word that an ounce of prevention is worth the proverbial pound of cure when it comes to maintaining this strong track record.
James N. Cleveland Scholarship Winner Announced
The Executive Committee of the Alabama Automated Clearing House Association (ALACHA) would like to congratulate Shannon Davis, Compass Bank, Birmingham, as the recipient of the James N. Cleveland Memorial Scholarship Award. This scholarship is awarded to one member of ALACHA each year.
Shannon will represent ALACHA at The Payments Institute to be held July 22-26, 2007 at the Emory Conference Center in Atlanta, Georgia. The Payments Institute is not just a conference; it is a unique “collegiate” learning experience that gives participants the opportunity to concentrate on specific topics and also provides them with a broad overview of the entire electronic payments system.
Publication Spotlight
 Walk-in Bill Payment - Guidelines for Billers & Walk-in Payment Providers
The NACHA Council for Billing and Payment (CEBP) developed this document as a tool to provide billers and walk-in payments providers (WIPPs) with guidelines regarding the collection and transmission of bill payments from consumers to billers. Payments service providers, billers, and financial institutions are increasingly being challenged by developments related to the risk, compliance and technology associated with walk-in payments (consumer bill payments made at a physical location).
Learn More
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AAP Related Training Materials
2006 NACHA Top 50
RDFI/ODFI List
NACHA - The Electronic Payments Association released the NACHA Top 50 lists of the largest originating and receiving financial institutions of automated clearing house (ACH) payments for 2006.
Financial institutions accounted for a 16.5 percent increase in ACH Network payments in 2006, said Elliott C. McEntee, President and Chief Executive Officer of NACHA. Combined with previous years record results, financial institutions ACH volume has increased by 71 percent in just three years.
The financial institutions in the NACHA Top 50 of originating institutions accounted for 95.7 percent of all inter-bank ACH payments in 2006, up from 93.7 percent in 2005. The Top 5 institutions accounted for 59.1 percent of all ACH origination activity; the Top 10 accounted for 76.0 percent.
On the receiving side, the financial institutions in the NACHA Top 50 accounted for 59.2 percent of ACH payments, up from 52.8 percent in 2005. The Top 5 institutions accounted for 28.5 percent, and the Top 10 accounted for 38.1 percent.
In the Top 50 data, NACHA includes all ACH-formatted transactions that financial institutions sent to or received from an ACH Operator - an electronic clearing house among banks - or directly to or from another financial institution. ACH-formatted transactions remaining within a single institution known as 'on-us' payments are excluded from the Top 50 results.
ACH payments include Direct Deposit of payroll, Social Security benefits and tax refunds, Direct Payment of consumer bills, bill payments by Internet and telephone, check conversion, business-to-business payments, and Federal tax withholdings. In 2006 there were nearly 16 billion ACH payments worth more than $33 trillion.
2007-2008 BOARD OF DIRECTORS
CHARLES B. BRETZ
Senior Vice President
Compass Bank
P.O. Box 10566
Birmingham, AL 35296
205-297-3962
charles.bretz@compassbnk.com
NANCY B. CARR
Vice President/Treasury Services
Regions Bank
2090 Parkway Office Circle
Birmingham, AL 35244
205-560-3433
nancy.carr@regions.com
RONALD C. HAAS
President
Alabama Central Credit Union
P.O. Box 2327
Birmingham, AL 35201
205-591-2228, Ext. 306
rhaas@alabamacentral.org
MOLLIE HAMILTON
Senior Vice President
Citizens Bank & Savings
P.O. Box 910
Russellville, AL 35653
256-332-1710
mollie.hamilton@cbsbank.net
JAMES C. HARRIS
Senior Vice President
Peoples Bank and Trust
P.O. Box 799
Selma, AL 36702
334-418-8327
jim.harris@peoplesbt.com
RICHARD LEARY
Senior Vice President
Wachovia Bank, N.A.
401 Linden Street, NC 6021
Winston-Salem, NC 27101-4157
336-735-2101
richard.leary@wachovia.com
GREG McCLELLAN
President & CEO
MAX Federal Credit Union
P.O. Box 244040
Montgomery, AL 36124
334-215-4645
hgm@maxfcu.com
CARL MILLER
Senior Vice President
First American Bank
P. O. Box 10686
Birmingham, AL 35211
205-421-2407
ctmiller@first-american.com
DOROTHY H. MOSELEY
Senior Vice President
Colonial BancGroup
2501 20th Place South, Suite 101
Birmingham, AL 35223
205-445-2370
Dorothy_Moseley@colonialbank.com
MARILYN L. RIGGINS
Vice President
Aliant Bank
P.O. Box 1237
Alexander City, AL 35011
256-329-7543
mriggins@aliantbank.com
TANGELA S. SOUDERS
President & CEO
Wiregrass Federal Credit Union
P. O. Box 216
Dothan, AL 36302-0216
334-793-3667
tsouders@wiregrassfcu.org
STEPHEN B. WHITE
Vice President
Redstone Federal Credit Union
220 Wynn Drive
Huntsville, AL 35893
256-722-3406
swhite@redfcu.org |
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1st Quarter 2007 ACH Network Transaction
 
 
3rd Quarter ACH Training Opportunities
| July |
| Workshop |
Dates / Times / Locations |
Cost |
 Monitoring ACH High Risk Activities to Ensure Compliance Webinar |
July 19, 2007
10:00 Am - 11:30 AM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| Green Book 101 Webinar |
July 30, 2007
11:00 AM to 12:30 PM, or
October 31, 2007
3:00 PM to 4:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| August |
| Workshop |
Dates / Times / Locations |
Cost |
| Regulation E Webinar Series |
August 1, 2007, (Part I), and
August 3, 2007 (Part II)
11:00 AM - 12:30 PM, or
November 2, 2007, (Part I), and
November 5, 2007 (Part II)
3:00 PM - 4:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line (1)
$250 / Phone Line (both)
Non-member
$300 / Phone Line (1)
$600 / Phone Line (both)
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| Bits-N-Bytes Webinar Series |
August 8, 2007 (Part I), and
August 10, 2007 (Part II)
11:00 AM - 12:30 PM, or
November 9, 2007 (Part I), and
November 23, 2007 (Part II)
3:00 PM - 4:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line (1)
$250 / Phone Line (both)
Non-member
$300 / Phone Line (1)
$600 / Phone Line (both)
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 ACH BITS-N-BYTES Workshop |
August 9, 2007
Arthur's Conference Center - Birmingham
144 Business Center Drive
Birmingham, AL 35244
1:00 PM - 4:00 PM
This is an in-person workshop
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Member
$100 / Person
Non-member
$200 / Person
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| ACH Exceptions Webinar |
August 13, 2007
11:00 AM to 12:30 PM, or
November 14, 2007
3:00 PM to 4:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| ACH Credit Underwriting Standards and Risk Selection Webinar |
August 15, 2007
2:00 PM - 3:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| AAP Review Course |
August 16 & 17, 2007
Alabama Banking Department
1 Riverchase Office Plaza
Suite 112
Hoover, AL 35244
9:00 AM - 4:00 PM
This is an in-person workshop
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Member
$275 / Person
Non-member
$550 / Person
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| September |
| Workshop |
Dates / Times / Locations |
Cost |
 AAP Review Teleseminar Series (Six Weeks) |
September 5 to
October 10, 2007
(weekly)
12:00 PM - 1:30 PM
Via telephone - Conveniently at your office
|
Member
$550 / Line
Non-member
$550 / Line
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| What the Board Needs to Know About ACH Webinar |
September 6, 2007
2:00 to 3:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| Check Fraud in the Consumer and Corporate World Webinar Series |
September 11, 2007 (Part I), and
September 14, 2007 (Part II)
11:00 AM - 12:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line (1)
$250 / Phone Line (both)
Non-member
$300 / Phone Line (1)
$600 / Phone Line (both)
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| More Than a Handshake - Legal ACH Agreements Webinar |
September 12, 2007
2:00 PM to 3:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| How to Combat Fraud in the ACH Network Webinar |
September 18, 2007
11:00 AM to 12:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| Identifying Your Remote Deposit Customer Webinar |
September 18, 2007
10:00 AM - 11:30 AM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| Green Book Training Workshop |
September 18, 2007
MAX Federal Credit Union - Montgomery
400 Eastdale Circle
Montgomery, AL 36117
1:00 PM - 4:00 PM, or
September 20, 2007
Arthur's Conference Center - Birmingham
144 Business Center Drive
Birmingham, AL 35244
1:00 PM - 4:00 PM
This is an in-person workshop
|
Member
$100 / Person
Non-member
$200 / Person
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| Help. I'm Considering a Debit Card Rewards Program Webinar |
September 20, 2007
2:00 PM - 3:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| How to Combat Fraud in the Card Network Webinar |
September 21, 2007
11:00 AM to 12:30 PM
Online/Phone - Conveniently at your office
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Member
$150 / Phone Line
Non-member
$300 / Phone Line
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| Survival Skills for the Fraud Investigator Webinar Series |
September 25, 2007 (Part I), and
September 25, 2007 (Part II)
11:00 AM to 12:30 PM
Online/Phone - Conveniently at your office
|
Member
$150 / Phone Line (1)
$250 / Phone Line (both)
Non-member
$300 / Phone Line (1)
$600 / Phone Line (both)
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