Regulatory Compliance Update January 2019

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

We have reviewed the Compliance News for December 2018.  The National Automated Clearing House (NACHA) and the IRS have issued new regulations.

NACHA – Issued new amendments to their operating rules.  The new rules will:

Speed up funds’ availability – Same day credits that are processed in the first window (10:30 AM Eastern time) will be made available by 1:30 PM Eastern time.  Non-same day credit fund will be available by 9:00 AM local time the next banking day.  Effective date 9/20/2019.

Same day dollar limit has been raised to $100,000.  Effective date 3/20/2020.

A third same day processing window has been added with a cut off at 4:45 PM Eastern time.  Effective date 9/18/2020

Please note:  The same day transactions currently apply to transfers between deposit accounts.  However, we should be aware that inevitably the transactions will be extended to payments.  We need to be prepared for multiple ACH transaction file generation during the processing day.

IRS – Has issued the 2018 rules for filing 1042-S forms.  The rules have been left unchanged.

Significant Dates:

December 17, 2018 – Comments due on IRS proposed rule for a “safe harbor” for small error on information returns.

January 1, 2019 – Effective date of IRS final regulations that remove automatic extension of time to file W-2 forms and Forms 1099-MISC that report non-employee compensation.

January 1, 2019 – Effective date for changes in Federal Reserve rules for altered and forged checks discussed above.

January 1, 2019 – Effective date for changes in Federal Reserve rules altering Regulation J to bring the Regulation in conformance with changes in Rule CC discussed above.

April 1, 2019 – Effective date for CFPB rules for Prepaid Accounts which implement changes to Regulation Z and Regulation E.

August 19, 2019 – Published Compliance date for CFPB’s final rule for payday loans.

Emerging Legislation:

With the congressional Christmas recess and the budget impasse, there have been no new legislative initiatives.

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