CUNA Offers Alternative to NACHA SSN Usage Proposals

WASHINGTON-CUNA suggested some admittedly burdensome software changes so all Automated Clearinghouse users could continue to use Social Security Numbers instead of eliminating or masking their usage as NACHA has proposed. CUNA Associate General Counsel Mary Dunn and Senior Regulatory Counsel Catherine Orr explained in the organization’s official comment letter that eliminating or hiding consumers’ SSNs would impede the receiving depository financial institution’s ability to confirm the correct recipient among others with the same name or if the account number is incorrect. Unmasking the data could be complicated, she added. If NACHA decides to omit SSNs from ACH entries, CUNA suggested that the ODFI be required to make system changes to enable RDFIs to determine if a SSN is being transmitted. “From CUNA’s perspective, it would be more efficient to have a specific field for the SSN and RDFI could suppress that field,” the letter read. Even though it would require time consuming and expensive software changes for the RDFI to recognize the field indicator, Dunn and Orr admitted, it would permit all ACH participants to continue using SSNs as backup to look into inquiries. “In addition, there may be legitimate reasons for financial institutions to print out SSNs, for example once a year to verify that the account information on the statement is valid. CUNA feels the rule ought to provide for such exceptions,” Dunn and Orr wrote. NACHA recently requested comments on whether its operating rules should specifically address the use of SSNs in ACH entries in response to a new California law.