Oregon State Treasury

Ted Wheeler OREGON STATE TREASURER

Automated Clearing House Network (ACH)

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GENERAL INFORMATION

Automated Clearing House (ACH) Overview
Agency Readiness
Implementation 

PRODUCTS / PROVIDERS

ACH Origination
Electronic Commerce (E-Commerce) 

REGULATORY 

Interagency Agreement 
Oregon State Treasury Policies
Regulatory Resources

RESOURCES

Electronic Payments.org
International ACH Transactions (IAT)
NACHA.org
WesPay.org


GENERAL INFORMATION

ORS 293.875 designates the State Treasurer as the sole banking and cash management officer for the state.  Via that designation, Oregon State Treasury (OST) has broad authority to review, establish, and modify policies and procedures for the efficient handling of cash and cash equivalents under the control of all state agencies, including universities.  OST acts as the bank for all state agencies, contracting with private banks and financial service providers to deliver a variety of cash management services to those agencies.

Additionally, OST negotiates with our financial service provider to offer a variety of optional cash management services that agencies may choose to utilize.  Via our negotiations with our provider, we ensure that all public depository and other regulatory requirements for these services are met.  For these optional services, agencies may choose  to contract with other vendors as long as their normal contracting process is followed and OST Third Party Vendor Policy (02.18.14)   requirements are met.

Automated Clearing House Network Overview 

The Automated Clearing House (ACH) Network (Network) is the backbone for the electronic movement of money and payment-related data.  It provides a safe, secure, electronic network for direct consumer, business, and government payments, and annually facilitates billions of Direct Deposit via ACH and Direct Payment via ACH transactions.  The Network, which is used by all types of financial institutions, is governed by NACHA Operating Rules, which guide risk management and create payment certainty for all participants.

OST administers a master agreement for ACH services and passes on the Originator responsibilities to State Agencies through an ACH Agreement.  As such, all state agency originated ACH transactions are required to flow through OST.

Agency Readiness

In preparation for implementing ACH services agencies should be prepared to review internal procedures, provide technical programming resources, execute an interagency agreement with OST, and be aware of regulatory requirements.  Mandating electronic payments can result in cost savings for agencies; however, there are certain state laws that pertain to mandating electronic payments such as development of administrative rules and other conditions.  Before deciding to mandate electronic payments, agencies should contact Treasury Management Services (TMS).

Implementation 

TMS will coordinate with state agencies on the implementation of ACH services.  The team is available to assist with business reviews, cost benefit analysis and setup of demonstrations of contracted banking service products that involve ACH.  The implementation timeline and resources can vary based on the solution selected.  Please contact TMS for more detailed information regarding ACH implementations.

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PRODUCTS / PROVIDERS 

The decision regarding which ACH product option to implement is generally that of the agency and can be based on a variety of timing, budgetary, and programmatic issues.  TMS is available to assist agencies in outlining the various considerations when determining a solution that best fits their needs.

ACH Origination   

  • Agencies can originate ACH transactions out of their own internally or contractor developed system. 
  • Procure services through 3rd party provider.

In contracting with a third party, agencies would need to adhere to DAS and/or other procurement requirements in addition to meeting all of OST 3rd party provider requirements as they relate to public fund laws, Payment Card Industry (PCI) Standards, and ACH requirements as may be applicable.

Electronic Commerce (E-Commerce) 

Agencies interested in accepting ACH via the internet through an E-Commerce solution, have three general options:  

  • The State of Oregon contracts with a statewide E-Commerce service provider.  As part of the contracting process, OST has qualified the statewide service provider for state agencies with respect to E-Commerce solutions.  Via the contract documentation being drafted, agencies will be able to utilize the statewide service provider’s ACH services without the need for additional procurement or 3rd party provider reviews for cash management compliance purposes. 
  • Additionally, as part of the State’s agreement with U.S. Bank to provide a variety of treasury management services, agencies may select an available U.S. Bank solution as an alternative.
  • As a final option, agencies have the ability to procure services through another 3rd party provider.  In this scenario, agencies would need to adhere to DAS and/or other procurement requirements in addition to meeting all of OST's 3rd party provider requirements as they relate to public fund laws, Payment Card Industry (PCI) Standards, and ACH requirements as may be applicable.

Agencies are encouraged to contact TMS to discuss the best option for your specific situation.

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REGULATORY 

Interagency Agreement

OST holds the master agreement for ACH Services for all state agencies. As such, any state agency originating or receiving ACH transactions must to enter into an Interagency Agreement for ACH Services.

Oregon State Treasury Policies

Agencies the implement ACH services agree to abide by OST Policies and other regulatory requirements.  The following are a list of OST policies related to ACH:

OST is in the process of reviewing and possibly updating our ACH policy set.  ACH originating agencies will be communicated with during this process and made aware of any changes resulting from our review.

Regulatory Resources

The following is a list of regulatory resources that agencies should be aware of and can utilize for reference purposes.  OST does not anticipate that agencies will be versed in all aspects of these regulations, however, it is important to be familiar with regulations that govern various aspects of electronic transactions.   

NACHA - The Electronic Payments Association manages the development, administration and governance of the ACH Network.

The E-Sign Act allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing.

Guidance focused on risk management controls necessary to authenticate the identity of retail and commercial customers accessing internet-based financial services.  

A guide for sending and receiving ACH payments to and from the federal government.

Regulation E establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services. The primary objective is the protection of individual consumers engaging in electronic fund transfers.


RESOURCES 

The following are additional resources that agencies may find useful.

Electronic Payments website provides education related to Direct Deposit via ACH and Direct Payment via ACH.

U.S. Bank website that provides general information regarding International ACH Transactions.  This information should only be used as reference purposes.

NACHA Operating Rules and Guidelines can be purchased on the NACHA website at the NACHA e-Store

WesPay is a regional payment association that focuses on promoting the growth of electronic payments.  A variety of training resources are available here.

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If you are interested in ACH or have questions about any of the above information,
contact a member of the
Treasury Management Services team
by sending an email to: