From Guidance to Enforcement: The Real Consequences of Not Preparing for Nacha’s Fraud Monitoring Rules
No bank wants to spend money on a new solution—especially in an environment where budgets are tight, headcount is constrained, and every investment must compete with growth initiatives.
That reluctance is understandable.
But as the Nacha Fraud Monitoring Rules move from guidance to enforcement, banks face a hard truth: doing nothing differently is not a neutral decision.
It is a decision to accept a growing—and compounding—risk.
This article explores what happens when banks rely on the status quo: manual questionnaires, limited customer visibility, and (inevitably) a reactive fraud response—after something goes wrong.
The New Reality: Bank Customers Are the Primary Targets of Fraud
Nacha has been explicit about why the new Fraud Monitoring Rules are essential: credit-push fraud is no longer an edge case—it is now the dominant fraud threat to the ACH Network.
That statement fundamentally reframes the risk landscape. Fraud is increasingly originating outside the bank’s perimeter, at customer sites where authorization is obtained, credentials are stored, and access controls vary widely.
Bad actors are arbitraging vulnerabilities by attacking the customers as the gateway to the bank.
That’s why the new Rules require (not just recommend) that banks look more closely at how their customers run their day-to-day operations (“verified by appropriate oversight”).
What Happens If Banks Change Nothing?
Manual questionnaires/surveys will come up short.
Many institutions have historically relied on periodic questionnaires or surveys to assess Originator or Third-Party Sender compliance.
These approaches tend to suffer from the same structural problems:
- Low completion rates
- Inconsistent answers
- Easy to game / minimal revelatory insight
- No standardized scoring or trend analysis
- Limited audit defensibility
- Heavy staff time spent chasing responses, let alone on compiling, analyzing and producing reports and remedial plans
- No tailored insights to help customers remediate gaps
The issue isn’t that questionnaires/surveys exist—it’s that they:
- don’t scale
- don’t produce consistent or often meaningful records
- don’t impactfully sensitive and empower customers to be active participants in fraud prevention (in the way the Rules are now asking banks to do)
When Fraud Happens First—and Questions Come Later
In a recent conversation, a community bank shared with us how they narrowly avoided a $1.6 million loss from a business email compromise (BEC) involving a valued commercial customer.
Unfortunately, stories like this are no longer rare—they’re now part of the day-to-day reality for banks across the U.S.
The payments in that near-miss example were technically authorized, so how could this happen?
The fraud occurred because a key employee of the customer was deceived by a savvy fraudster (human factor risk)—exactly the type of “False Pretenses” scenario Nacha’s new Rules were created to address.
The bank avoided the loss, but the aftermath raised uncomfortable questions:
- What visibility did the bank have into the customer’s actual authorization practices?
- What evidence existed that the customer had been educated or empowered to manage BEC risk?
- What records demonstrated the bank had oversight prior to the event?
Without that evidence and records an examiner might find that the bank is ultimately responsible under the Rules for any resulting loss, regardless of what’s in the origination agreement (under Rules Section 2.1 and the BSA and AML regulations). Near misses are warnings. The next incident may not end the same way.
Examiner Questions Banks Should Expect
The New Rules signal a regulatory (and audit) focus on how banks oversee customers’ compliance/risk management. Once enforcement begins, examiners will not only ask whether banks have oversight—but how banks’ reliance on customer compliance or fraud monitoring is verified and enforced.
Common questions are likely to include:
- How do you know your Originators understand and follow authorization requirements?
- What evidence shows you reviewed customer fraud controls annually?
- How do you identify higher-risk customers (based on operational compliance, not just the traditional factors like return rates) and adjust oversight accordingly?
- What does “appropriate oversight” look like in practice at your bank?
These are not theoretical questions. They ensue from the placement of the New ODFI Rule following Section 2.1 and Nacha’s stated standard for reliance on third-party operational compliance: “verified by appropriate oversight”—language that implies evidence, not intention.
What Happens If A Bank Is Non-Compliant?
A critical misconception persists: that Nacha violations primarily result in modest fines.
In reality, monetary penalties are often the smallest part of the impact.
If a bank is found non-compliant with Nacha Rules—particularly around customer authorization and Fraud Monitoring—the potential consequences include:
1. Regulatory escalation
Nacha Rules intersect with broader regulatory expectations around operational risk, third-party risk management, and safety and soundness. A Nacha compliance failure can quickly expand into broader supervisory scrutiny.
2. Reputational damage
Fraud events tied to weak oversight erode trust with customers, counterparties, and regulators—especially when losses fall on small businesses, nonprofits or municipalities.
3. Litigation risk
Even when banks are not legally at fault, customers harmed by fraud often seek recovery. Banks sometimes absorb losses simply to avoid reputational harm or prolonged disputes.
4. Growth constraints
Regulatory findings can limit:
- new product launches,
- onboarding of higher-risk customers,
- acquisitions or strategic expansion.
In short, a compliance failure can become a growth inhibitor.
The Concept of a “Compliance Deficit”
One of the most dangerous positions a bank can be in by June 2026 enforcement is running what can be described as a compliance deficit.
A compliance deficit occurs when:
- Regulatory expectations/rules have clearly shifted,
- Peer institutions have upgraded their approaches and solutions to comply,
- Regulators expect demonstrable evidence aligning with the new Rules
- But the bank lacks scalable systems, records, and oversight mechanisms.
At that point, catching up is far more expensive than preparing early. A compliance deficit can lead to reactive spending, emergency remediation, and rushed implementations—often under examiner pressure. An examiner’s discovery of a compliance deficit may also entail a finding of a violation of a reporting duty.
What Happens When Fraud Hits?
Many institutions delay investment until something bad happens. That approach is risky for three reasons:
- Fraud impact is massive
A single event can erase years of building healthy cash reserves. - Post-incident scrutiny is harsher
Controls that might have been acceptable before an incident are judged more critically afterward. - Remediation under pressure is inefficient
Emergency fixes cost more, strain staff, and often miss strategic alignment.
“You can control compliance and therefore, to an extent, the resulting costs. Waiting removes that control.”
— Trevor Lain, JD, Founder & CEO, Lexalign
A Necessary Investment at a Critical Moment
No one wants to buy new technology, but here is the 2026 reality:
Fraud has shifted. Regulatory expectations have shifted. And responsibility now explicitly includes educating, sensitizing, and overseeing customers—the very place fraudsters are concentrating their efforts.
Banks that invest now are not just buying compliance. They are:
- protecting deposits,
- preserving customer trust,
- safeguarding growth plans,
- and avoiding compounding risk.
The question is no longer whether banks will need stronger tools to meet requirements under the new Rules.
The question is whether they will implement them before or after something goes wrong.
Doing nothing may feel cheaper today. But under the new Nacha Rules, inaction is far more expensive than having a strong, scalable solution in place on Day 1.
What “Risk-Based” Really Means Under Nacha’s Fraud Monitoring Rules
What “Risk-Based” Really Means Under Nacha’s Fraud Monitoring Rules
(And What It Doesn’t)
Written by Julie Goff, JD, Head of Operations, Lexalign
When Nacha introduced its new Fraud Monitoring Rules, one phrase immediately became central—and, for many banks, confusing: “risk-based” procedures.
The term appears straightforward, but in practice it isn’t always easy to interpret. Some institutions read it as permission to do less. Others assume it requires exhaustive, transaction-by-transaction monitoring of every ACH Entry.
Neither interpretation is correct.
To comply with the new Nacha Fraud Monitoring Rules—and to prepare for examiner expectations—banks need a clear, defensible understanding of what “risk-based” means, what it does not mean, and how it should inform planning under the Rules.
This article unpacks that definition using themes and guidance that have been consistently reinforced by Nacha officials and industry experts.
Where “Risk-Based” Appears in the Nacha Rules
The first fraud monitoring Rule appears in Article 2 (Prerequisites to Origination). It requires participants in the ACH Network—including ODFIs, Originators, and Third-Party Senders—to:
establish and implement risk-based processes and procedures, relevant to the role it plays in the authorization or Transmission of Entries, that are reasonably intended to identify Entries that are suspected of being unauthorized or authorized under False Pretenses.
Each part of that sentence is intentional and guides the interpretation. In this blog post I’ll focus on “risk-based.”
What Does Nacha Mean by “Risk-Based”?
In Nacha’s explanations of the Rule, “risk-based” is not used casually or as a catchall. It should be read in conjunction with the word “role” in the sentence: procedures should be aligned to each Party’s role in the ACH flow, and also to both their level of ACH activity, and their ability to detect fraud at that point in the process.
This allows us to infer three key implications:
1. Risk-based is role-based.
The Rule explicitly recognizes that different participants face different risks:
-
- ODFIs face risk by transmitting Entries they do not themselves originate and must manage the aggregate exposure of their Origination portfolio.
- Originators face risk at the point of initiation—where account takeover, social engineering, and impersonation schemes (including business email compromise and increasingly voice or video impersonation) exploit gaps in authorization and access controls.
- Third-Party Senders often face a combination of these risks, depending on how their TPS and TPSP roles are structured and how much control they exercise over origination.
Risk-based procedures must align to what each Party can reasonably see and control, not to risks that arise elsewhere in the flow.
2. Risk-based focuses on probability and impact—not perfection.
Understanding “risk-based” also requires distinguishing risk from compliance.
On an individual party level, risk refers to the probability of a costly disruption to normal operations or expectations—whether arising from fraud, cyber incidents, operational failures, or market events. As used in the Nacha Operating Rules, though, “risk” also means the risk to the Network–the impact a party’s actions or omissions might have on other parties active on or affected by activities on the Network.
Compliance, by contrast, refers to the records and evidence that demonstrate a covered party is satisfying applicable requirements and expectations.
The new Rule does not require banks—or their customers—to eliminate fraud entirely. That is neither realistic nor expected. Instead, it requires measures that are reasonably proportional to the risk a party presents to the Network, taking into account both role and transaction activity.
At the same time, the Rule makes clear that banks must be able to demonstrate risk-based compliance through records. When fraud occurs, the absence of records can have enormous effect—it can greatly amplify regulatory, legal, financial and reputational consequences.
3. Risk-based explicitly includes fraud induced under False Pretenses.
This is one of the most important evolutions in the Nacha Rules.
Nacha defines False Pretenses as the inducement of a payment by misrepresenting:
-
- a person’s identity,
- a person’s authority or association with another party, or
- ownership of the account to be credited.
In practical terms, False Pretenses captures impersonation-based fraud—including business email compromise, payee impersonation, and similar social-engineering schemes.
These transactions may appear authorized on their face, but they are fraudulent by definition. The Rule explicitly brings these scenarios within the scope of required fraud monitoring.
What “Risk-Based” Does Not Mean
Just as important as understanding what the Rules require is understanding what they do not require.
1. It does NOT mean monitoring every transaction in real time.
Nacha has been clear in its rulemaking and FAQs that screening every ACH Entry before posting is not required.
Transaction monitoring remains an important control, but it is not sufficient for credit-push fraud, which is intentionally engineered to look legitimate and evade bank-side filters.
2. It does NOT mean shifting responsibility to customers.
Another common misconception is that because Originators and Third-Party Senders now have explicit fraud-monitoring duties, responsibility has shifted away from banks.
That is not the case, as Nacha makes clear in the Rule itself and in the FAQs.
The “general rule” in Article 2 that ODFIs are responsible for Entries originated by their Originators and Third-Party Senders has not changed. Risk-based procedures do not alter Subsection 2.1 of the Rules or the ODFI’s ultimate responsibility for Entries, and for the compliance of those customers..
Origination agreements that specify customer obligations are necessary to bind the customer to the Rules—but they do not eliminate the bank’s responsibility for oversight. In effect, Nacha is imposing a supervisory duty on the ODFI with respect to its customers’ compliance. Indeed, in describing when a bank can rely on a third party’s (including a customer’s) origination controls, Nacha has specified a standard: “verified by appropriate oversight.”
3. It does NOT mean relying solely on attestations or disclosures.
Simply asking customers to certify compliance or complete a high-level questionnaire, without meaningful engagement or visibility into their operations, does not satisfy the intent of risk-based oversight.
In an article last year, Nacha described how its Risk Management Advisory Group found gaps they had relied on customer assurances on audits, where the customer could not supply records appropriate for an audit. Reliance solely on third party assurances or attestations can mean actual compliance gaps remain invisible and unaddressed—often revealed only after a fraud event.
What Risk-Based Does Mean in Practice
A practical, defensible risk-based approach centers on three foundational questions.
1. Where does fraud most likely enter the system?
For credit-push fraud, Nacha has consistently emphasized that customers are now a primary point of attack.
That means risk assessment must extend upstream into Originator and Third-Party Sender operations, not remain solely within bank-side transaction monitoring.
2. What controls are reasonable at that point of entry?
At origination, reasonable controls include:
-
- how counterparties are verified,
- how authorization is obtained and validated,
- whether and how Receiver accounts are validated,
- how access to payment systems is secured, and
- how unusual or high-risk activity is identified.
These are operational controls, not just analytical ones.
3. How does the bank demonstrate oversight?
This is where risk management and compliance converge.
Following risk-mitigating practices lowers the probability of fraud—but without records showing that those practices were implemented, reviewed, and maintained, banks lack compliance defensibility.
Risk-based management must therefore produce evidence, not just policy statements or intentions.
How Should Banks Think About Planning Under the New Rules?
When planning for compliance with the Nacha Fraud Monitoring Rules, banks should anchor on four principles:
-
- Layered, not singular: No single control addresses credit-push fraud.
- Customer-inclusive: Fraud monitoring explicitly involves Originators and Third-Party Senders.
- Proportionate: Higher-risk customers require greater scrutiny than lower-risk ones.
- Demonstrable: Examiners will expect evidence of assessment, action, and review.
Banks should avoid programs that are either over-engineered (unsustainable) or under-scoped (defensible only on paper).
Risk-based does not mean “do less,” and it does not mean “do everything.”
It means doing the right things, in the right places, for the right reasons—and being able to demonstrate that to examiners.
The "4 Boxes" to Check for Audit-Ready Compliance
As financial institutions enter 2026, one topic continues to surface in payments, risk, and compliance conversations: Nacha’s new Fraud Monitoring Rules. Most institutions know the Rules are coming. Fewer feel confident they fully understand what the Rules practically require—or whether their current tools are sufficient.
If that sounds familiar, you’re not alone.
We’ve spent the past year in deep conversations with banks and credit unions of all sizes, and a consistent theme emerges: the Rules are dense, role-based, and incorporate multiple articles, FAQs, and guidance. They don’t map neatly to a single technical solution or system.
And yet, when examiners or auditors come knocking, the expectation is clear: you must be able to demonstrate (with records) that you and your customers are taking action.
The goal of this post is to simplify the problem without oversimplifying the Rules.
A useful way to think about Nacha’s fraud monitoring requirements is as four distinct “boxes” that must be checked. Each box represents a different role in the ACH ecosystem and a different set of expectations.
No single tool checks all four—and that’s okay. Compliance is about having the right toolkit, not a silver bullet.
Let’s walk through the four boxes, what Nacha is asking in each, and how FI’s are approaching readiness.
Why the Rules Feel Different This Time
Before diving into the boxes, it’s worth acknowledging why these Rules feel heavier than prior updates.
At their core, the new Rules focus on identifying unauthorized transactions and transactions authorized under false pretenses—including business email compromise, vendor impersonation, payroll fraud, and account takeover.
But the most significant shift is where Nacha places responsibility.
For the first time, the Rules explicitly recognize that fraud prevention cannot live solely inside the bank. Fraudsters increasingly target non-consumer bank customers because they can manipulate human behavior and make fraudulent transactions appear legitimate to legacy monitoring systems.
As Nacha has made clear, this framework only works if “all participants” play an active role—including Originators and Third-Party Senders.
That reality fundamentally changes what FIs must be prepared to demonstrate.
The 4-Box Framework: A Practical Way to Think About Compliance Under the New Rules
Box 1: ODFI Responsibilities — Monitoring Outbound ACH Entries
What The Rules Require
For outbound ACH entries, Nacha expects ODFIs to establish and implement risk-based processes and procedures designed to identify and prevent the transmission of fraudulent entries. These processes must be reviewed at least annually and updated to address evolving risks.
Importantly, the Rules do not require banks to scrutinize every transaction equally. Risk-based means focusing more attention on higher-risk transactions, customers, or patterns.
How banks are approaching this
For many banks, this box is familiar territory. Transaction monitoring became standard during the rise of debit fraud, and most institutions already have tools and processes in place. The key question is whether those tools have been enhanced to address credit fraud patterns, not just debit fraud.
For many institutions, Box 1 is less about acquiring new technology and more about validating and documenting that existing monitoring aligns with the new expectations. (Documentation is key to demonstrating compliance.)
Box 2: Originators — Authorization and Human-Factor Risk
What The Rules Require
This is where the new Rules introduce the greatest challenge.
Originators are responsible for establishing risk-based procedures to:
- Prevent transactions that are unauthorized (e.g. account takeover) and
- Identify/stop transactions that are authorized under false pretenses (e.g. BEC, payee impersonations)—in other words., scenarios specifically designed to bypass bank-side transaction monitoring.
While Nacha does not regulate Originators directly, the Rules make clear that banks are responsible for ensuring their Originators are meeting these expectations, through their origination agreements and oversight practices.
Crucially, Nacha has articulated a standard here: Originator compliance is expected to be “verified by appropriate oversight” by the ODFI.
Why this box is hard to check
Unlike transaction monitoring, this risk largely lives in human behavior. There is no plug-in that can stop an employee from being tricked into changing vendor payment instructions or approving a fraudulent payroll file.
Historically, many banks relied on:
- Static questionnaires to inquire about customer operations
- One-time onboarding reviews with new customers
- Sending customers the rulebook or policy language
- Posting general rule guidance on bank website (not customer specific)
Under the New Rules, those approaches are increasingly difficult to defend. Auditors and examiners are looking for evidence that banks have:
- Empowered customers to understand rules that are actually applicable to them
- Assessed whether appropriate controls are actually in place within a customer’s unique environment and remote operations
- Maintained records that demonstrate that they are actively doing the above 2 points with each non-consumer Originator.
This is where many banks realize they have a gap—not because they aren’t trying, but because manual approaches don’t scale across a large commercial customer base. (But good news – there is a solution!)
Box 3: Third-Party Senders — Oversight and Proof
What The Rules Require
Not every bank has Third-Party Senders—but many discover them through closer review of their customer base. In some cases, an Originator may effectively be operating as a Third-Party Sender over time.
For Third-Party Senders, Nacha expects risk-based controls to identify and prevent fraudulent entries, similar to ODFI expectations. The difference is in oversight and evidence.
Fortunately for FIs, the Rules already require TPS to do an annual audit, similar to the ODFI responsibility. ODFI are expected to assess completion of those audits and, when requested, attest to them. However, recent Nacha guidance has emphasized not just attestation of compliance, but proof of audit, implying that attestation is grounded in a review of evidence—and banks are expected to review and retain that proof.
For this box, then, it will be important for banks to demonstrate that the review of TPS annual audits included compliance with the new Fraud Monitoring Rules: that the TPS is doing something, commensurate with their risk, to detect and stop unauthorized or fraudulently authorized transactions. (Again, good news – there is a solution for this too!)
Why this matters
Even when Third-Party Senders are low-volume or lower-risk, banks remain responsible for demonstrating oversight. If a TPS is involved in fraud, examiners will ask:
- How did you assess their controls?
- What records show you reviewed their compliance?
- How do you know their risk-based approach is appropriate?
This box is often overlooked until late in the readiness process, but it can quickly become a point of examiner focus.
Box 4: RDFI Responsibilities — Monitoring Inbound Credit Entries
What The Rules Require
On the receiving side, RDFIs must establish risk-based processes to identify suspicious incoming credit entries and respond appropriately. Nacha has provided examples of patterns that warrant attention, including:
- SEC code mismatches
- Atypical transaction amounts
- Rapid series of similar credits
- Activity involving new, dormant, or mule-like accounts
As with other boxes, these processes must be reviewed annually and updated as risks evolve.
How banks are approaching this
Like Box 1, many banks already have tools or procedures that address inbound monitoring. The work here often involves:
- Confirming patterns covered by existing systems
- Documenting response procedures
- Ensuring annual review is explicit and recorded
Why No Single Tool Checks All Four Boxes
One of the most important takeaways from the new Rules is this: compliance requires a toolkit approach.
Each box reflects a different role, a different risk profile, and often a different operational owner. Expecting one system to cover outbound monitoring, customer behavior, third-party oversight, and inbound detection is unrealistic—and Nacha does not require that.
What regulators do expect is that banks:
- Understand each obligation clearly
- Align tools and processes to each box
- Can produce records showing how each expectation is met
This framing often brings relief. It allows banks to stop searching for a mythical “end-to-end compliance solution” and instead focus on closing specific gaps.
Where Lexalign Fits: Checks Boxes 2 and 3
Across institutions, the most persistent challenges tend to live in Boxes 2 and 3:
- Originator controls and human-factor risk
- Oversight records that demonstrate compliance
Lexalign was built specifically to address these challenges.
Lexalign provides a structured, automated way for banks to:
- Guide customers through tailored, rule-aware diagnostic interviews (not generic questionnaires)
- Educate customers on applicable requirements in context
- Identify gaps and produce actionable remediation plans
- Maintain audit-ready records that demonstrate “verified by appropriate oversight”
- Support risk-based prioritization across the customer portfolio
By focusing on the customer side of remote operations—where many of today’s fraud risks originate—Lexalign complements, rather than replaces, existing monitoring systems.
You’re Not Behind—You’re Right on Time
If you’re still evaluating what the Nacha Rules require, or whether your current tools are sufficient, it’s worth saying this clearly: most banks are in the same place.
These Rules are complex by necessity: they reflect a changing fraud landscape and a recognition that prevention requires shared responsibility. The institutions that will navigate this most effectively are not those who rush to buy technology, but those who take the time to:
- Understand each obligation
- Assess your toolkit honestly
- Address gaps deliberately
A Simple Next Step
If Boxes 2 and 3 feel like the hardest pieces of the puzzle—and for many banks, they are—we invite you to start a conversation.
The Lexalign team works with banks every day to map the four boxes, identify exposure, and determine whether Lexalign is the right fit for supporting Originator and Third-Party Sender oversight.
Connect with us to explore how Lexalign can help you confidently check Boxes 2 and 3—at scale, with clarity, and with audit-ready confidence.
Fraud Monitoring vs. Transaction Monitoring - Key Distinctions to Know for the New Nacha Rule
Nacha’s new Fraud Monitoring Rule (the “New Rule”) requires risk- and role-based fraud monitoring. It explicitly applies to banks (ODFIs) as well as their non-consumer customers that submit ACH Entries on behalf of themselves or third parties.
Nacha has created a list of vendors that provide “fraud monitoring” services pertinent to the New Rule. Many provide some form of transaction monitoring and/or behavior monitoring services. The question has been raised: Is it sufficient to rely on transaction or behavior monitoring to demonstrate compliance with the New Rule? This blog addresses that question.
As a preliminary matter, let’s establish that compliance requires records, and more particularly records that meet the Federal Rules of Evidence – i.e., they would stand up in a Federal court of law to establish that an event occurred. That means that risk management without records that meet that standard would not protect the bank in the event of a compliance enforcement action.
The New Rule itself explicitly raises the possibility of an enforcement action. It states that it is enforceable by Nacha pursuant to its Rules Enforcement powers contained in Article 9 of the Operating Rules. That Article in turn states that Nacha may bring an enforcement action against an ODFI for its or its customers’ compliance, typically based on excessive Return Rates or RDFI complaints. Nacha may also bring action against an ODFI for failure to comply with annual compliance audit requirements, or to attest to proof of its Third-Party Sender’s audit. Finally, the Rules make clear (in the Article 2 General Rule) that the ODFI is responsible for its Originators’ and Third-Party Senders’ compliance.
As discussed above, the New Rule requires role-based compliance: more specifically, it states that the covered entity (the ODFI, Originator, TPS or TPSP) “must establish and implement risk-based processes and procedures, relevant to the role it plays in the authorization or Transmission of Entries[.]” (Emphasis added for clarity.) As a party largely engaged in the Transmission of Entries, the ODFI may reasonably conclude that implementing a well-regarded transaction-monitoring service could help it demonstrate compliance with the New Rule, as it applies to its own operations. Indeed, the inclusion of various transaction-monitoring services in Nacha’s list of vendors supports that conclusion. Adding a behavior-monitoring tool, which reviews other factors relating to the submission of an Entry to the ODFI and analyzes them for patterns indicative of fraud, could also be seen as relevant to the bank’s demonstration of compliance with the New Rule, for the same reason.
What about a Third-Party Sender? Presumably, a high-volume TPS that relies on third parties for origination (compliance with the Article 2 requirements) could also point to use of a transaction and/or behavior monitoring service to show compliance, as its role is similarly in the transmission of Entries.
But what about a party whose role involves the authorization of Entries? Authorization is covered in Article 2 of the Operating Rules, and as an uncapitalized term in the New Rule could be read to mean compliance with any the origination requirements pertinent to fraud prevention. Just as one example, a party that originates a consumer debit authorized orally by telephone is required to verify the consumer’s identity. In the New Rule FAQs, Nacha also emphasizes another procedure specific to the Originator role:
Originators may be best placed to implement procedures to protect against account takeover or other vectors for initiating unauthorized transactions. Such procedures could include change controls regarding payment information and instructions for vendor and payroll payments.
Clearly, Nacha expects Originators involved in corporate credits or certain recurring consumer credits (direct deposit) to show that they’ve implemented procedures to verify the validity of instructions they receive to change the payment information for those transactions, in order to staunch a very common vector for fraud that (presumably) often evades transaction monitoring.
Neither of the above examples involve transaction monitoring. And, to underline this point, Nacha states in the FAQs that screening of “every ACH entry individually” is not required under the New Rule – i.e., the Rule means something different.
Taken together, these factors mean that compliance with the new Fraud Monitoring Rule, on the one side, and transaction or behavior monitoring, on the other, are not the same. In some cases, as it relates to a party’s role or risk, records that evidence transaction or behavior monitoring can support compliance with the New Rule. In other cases, and particularly in the case of the Originator, they would not suffice.
The Overlooked Risk in Nacha’s New Fraud Monitoring Rule — and How LexAlign Solves It
The Nacha Fraud Monitoring Rule, effective March 2026, is one of the most significant updates to ACH compliance in years. It requires every non-consumer participant in the ACH Network — banks, Originators, and Third-Party Senders — to implement risk- and role-based fraud monitoring procedures.
But here’s the real challenge: your customers are the frontline of fraud. They’re the ones targeted under what Nacha has called “the most significant” form of fraud to account holders: Credit-Push Fraud. If their defenses fail, the risk doesn’t stop there — it flows directly back to the bank.
And the ACH Rules are clear: banks are responsible for ensuring their customers comply. That means gaps in customer compliance are a liability for the bank.
So, how can banks realistically meet this new compliance requirement while protecting themselves from fraud risk?
The answer is LexAlign.
When is it Reasonable to Rely on Customer Fraud Prevention?
The New Rule permits FIs to rely on other parties involved in origination to carry some of the burden of fraud prevention. However, in FAQs, Nacha states clearly: "The basis for relying on another originating entity should be reasonable and clear (e.g., allocated by contract and verified by appropriate oversight)." That means complete reliance on contracts is likely insufficient as a basis. FIs need to verify customers are managing risk via oversight. But how can an FI do this at scale?
Among the resources available to banks and credit unions for the New Rule, LexAlign is uniquely focused on fortifying the true frontline of fraud — your customers — while also giving FIs the records they need to demonstrate oversight and compliance.
With LexAlign, banks don’t just “check the box” on compliance. They:
- Empower customer compliance
- Strengthen customer defenses against ACH fraud
- Reduce exposure to liability when fraud occurs
- Generate audit-ready compliance records examiners expect to see
How LexAlign Works
LexAlign operationalizes Nacha’s new fraud monitoring requirements into a concrete, customer-facing program that produces actionable data for both banks and their customers. Here’s how it works:
Step 1: Customer Self-Assessment
Your commercial customer logs into a simple dashboard. No training needed. Through a intuitive, conversational self-assessment, LexAlign determines their actual ACH activity — consumer vs. corporate transactions, credits vs. debits – to determine their role (Originator vs. Third-Party Sender) and applicable requirements.
LexAlign then analyzes their compliance with the applicable Nacha Operating Rules and Guidelines, regulations, statutes, and official guidance.
Step 2: Instant Results for Customers
When the self-assessment is complete, customers instantly receive:
- An Audit Report containing three essential data points:
- Inventory of their regulated transactions
- Gap Analysis with rule references and compliance status
- Action Plan with step-by-step remediation guidance
- Policy & Procedures packet for training and compliance demonstration
- Interactive Remediation Checklist to track and attest to fixes
This transforms vague compliance expectations into concrete, actionable steps.
Step 3: Actionable Data for the Bank
While customers are empowered, the FI receives:
- Risk-Based Scoring to identify customers with elevated risk
- Data points that enable proactive, targeted and effective risk management routines
- Insight on customer needs and well-being
- Objective bases for taking actions
- Audit-Ready Records that show regulators the bank has performed according to the Rules
Engagement is another differentiator: while manual surveys typically get less than 25% completion, banks using LexAlign regularly achieve 80%+ engagement and compliance scoring across 100% of their commercial customers.
Why This Matters for the Nacha Fraud Monitoring Rule
Without proactive measures, FIs shoulder the liability.
But with LexAlign, FIs:
- Strengthen fraud defenses at the customer level
- Demonstrate oversight
- Manage the risk of fraud-related liability via records that demonstrate responsibility and alignment with Nacha's rules and guidance
- Have a plausible argument for shifting the risk of payment orders to their Originators under applicable statutes
This is why LexAlign is more than a tool — it’s a liability-limiting function for banks under Nacha’s New Rule.
The Bottom Line
The Nacha Fraud Monitoring Rule isn’t just another regulation. It’s a strong signal that Nacha intends to enforce ODFI responsibility for customer compliance and fraud prevention.
With LexAlign, FIs finally have a scalable way to:
- Enforce Nacha compliance across all customers
- Protect themselves from liability
- Build audit-ready records examiners will accept
Don’t wait until March 2026 to figure this out. The risk is already here — and Nacha intends to enforce it.
LexAlign makes compliance clear, actionable, and defensible — for FIs and their customers alike.
Nacha’s New “Attestation of Proof of Audit” Requirement — What It Means for ODFIs and TPSs
Last month, Nacha signaled another significant change in ACH compliance: in ACH Operations Bulletin 3-2025 (9/11/25), Nacha announced that ODFIs will be required to submit attestation of proof of annual rules compliance audits through Nacha’s new secure channel, as soon as this month (October 2025). This most recent development builds upon earlier recommendations from Nacha’s Risk Management Advisory Group (RMAG) and has direct implications for both banks and their Third-Party Senders (TPS).
Nacha’s Wording Implicates Records
The subtle but important requirement is that Nacha is requiring not just an attestation of audit but an attestation of “proof” of audit. Nacha clarifies that:
Proof of audit typically includes audit reports, internal review documentation, remediation plans for any identified deficiencies, and confirmation of management oversight.
While Nacha is not requiring that banks (ODFIs) submit more than an attestation, an attestation is a legal statement reflecting knowledge of certain facts. An attestation by an officer of a bank creates the risk of liability for both the officer and the bank. Though Nacha explicitly leaves it to the bank to determine if reliance on a TPS attestation of audit is sufficient under the bank’s policies, it could be risky to do so, as Nacha has previously signaled.
From “Check-the-Box” to Real Accountability
In February 2025, Nacha and RMAG raised concerns in a piece titled Should an ODFI Ask a TPS for Proof of a Rules Compliance Audit?. In that blog, they discussed their concerns that many TPS’s (across ODFIs) were simply signing attestations that they had performed an audit — without ever conducting one.
As Trevor Lain, CEO of Lexalign, explains:
“What RMAG members found is that customers were checking the box — attesting they’d completed an audit — but when asked for documentation, they had nothing to show. Banks were trusting, but not verifying. This isn’t sustainable from a legal or regulatory perspective.”
Because, under Article 2 of the Nacha Operating Rules, ODFIs are primarily responsible for their Originators’ and Third-Party Senders’ compliance, relying on unchecked promises leaves banks exposed.
In short, the liability ODFIs have long placed on their TPSs has officially shifted back to them – and it's now time to upgrade their policies, procedures and operations to be ready.
What the New Nacha Bulletin Implicates
The new ACH Operations 3-2025 bulletin automates and enforces oversight:
- ODFIs will be required, upon request, to submit attestation of proof of audit through a secure Nacha channel
- By automating the outreach/response process, Nacha can now request many more ODFIs than previously to supply the attestations in a given year.
- This doubles down on the reality faced by large institutions which must demonstrate not just attestations, but documented audits.
- Nacha’s intent is clear: move the industry from self-certifications to reviewable, verifiable compliance audits.
As Lain notes, this reflects a broader trend:
“This isn’t just about ODFIs anymore. Each originator and each TPS now has a defined role in compliance and risk management. Nacha is saying: ‘We’re not kidding.’”
Why It Matters
- For ODFIs: You must ensure you can demonstrate not just your own compliance, but also that of your TPS customers.
- For TPS: You can no longer simply sign an attestation. You’ll need a real, documented rules compliance audit — and be ready to deliver it to your ODFI.
- For Regulators: The move shows Nacha’s increasing seriousness in pushing the Network toward proactive fraud prevention and risk monitoring.
How Lexalign Helps
Lexalign already equips ODFIs with automated, compliance diagnostic assessments for Originators, that is designed to empower their compliance and reveal hidden TPS. Now, we’re extending that capability to TPS. Our Third-Party Sender Audit Module enables:
- Risk-based compliance reviews of TPS activities in line with the Nacha Operating Rules and Guidelines
- Records and data that empower TPS compliance and enable ODFIs to demonstrate proof of audit, including audit reports with gap analyses and remediation plans, checklists, policies and procedures, attestations and acknowledgements – all designed to meet the Rules of Evidence.
- Efficiency and scalability, especially for banks with hundreds or thousands of TPS or originators.
As one senior banker recently described it, Lexalign’s TPS audit is “the wedge into the bank” — an accessible first step toward a broader compliance strategy.
Here’s The Good News
Nacha’s latest bulletin is more than a technical update. It’s a clear statement: the era of “check-the-box” compliance is over. Banks must be able to prove that audits are conducted, and TPS must be prepared to deliver them.
But here’s the good news: Lexalign provides the framework for doing just that — helping ODFIs and TPS move from promises to satisfactory proof, at scale.
Learn more about how Lexalign supports ODFI and TPS compliance, talk to our team!
The Hidden “Gotcha” Within Nacha’s New Fraud Monitoring Rule
Think You’re Ready for Nacha’s New Fraud Monitoring Rule? Think Again.
Your bank has implemented state-of-the-art transaction and behavior monitoring solutions for fraud detection. That’s a great first step. Unfortunately, you’re still about to be dinged under Nacha’s new Fraud Monitoring Rule (“New Rule”).
Don’t get us wrong: if you haven’t implemented modern fraud detection systems, you’re behind the times and need to catch up. The good news is that there are lots of great solutions you can choose from.
But that’s not sufficient under the New Rule. Because the Rule is not really about you.
Here’s what to know: with the New Rule, Nacha is signaling it’s going to start enforcing the bank’s (ODFI’s) responsibility for its Originators’ and Third Party Senders’ compliance, under the Article 2 “General Rule.”
How do we know this? Because Nacha forecasts new requirements in articles and blogs months or years in advance. To understand new ACH rules, you have to read the context.
In 2022, Nacha made a bold statement that got too little attention. In an article entitled, “A New Risk Management Framework for the Era of Credit-Push Fraud,” Jane Larimer, Nacha’s President and CEO, stated bluntly: “Fraud keeps changing. As it does, participants in the payments system need to understand and adapt to emerging fraud scenarios and develop counterstrategies to help protect their customers and themselves.”
She said, the problem is we’re focused on yesterday’s fraud. In the past, Debit Fraud —that is, unauthorized debits of consumer accounts— was the biggest threat, and the Network did a good job combatting that. Indeed, most of the “Prerequisites to Origination” covered in Article 2 of the Nacha Operating Rules were created to prevent Debit Fraud.
But, she said, “Now, however, the most significant fraud threats to bank account holders involve fraud and scams that result in money being sent out of their accounts using credit payments, including ACH credits, wires, cards, and other instant and digital payments” – that is, Credit-Push Fraud, which encompasses a range of schemes also known as Authorised Push Payment (APP) fraud, or “relationship and trust fraud,” including (but not limited to) vendor and employee impersonation fraud.
To combat this fraud, she said we need to change in two key ways: (1) more fraud information sharing, and (2) the involvement of “all participants” working together. (Specifically, she wrote: “All participants in the payment system, whether the ACH Network or elsewhere, have roles to play in working together to combat fraud.”)
“All participants” necessarily includes the parties doing origination – which obviously includes customers as Originators or Third-Party Senders. We tested this interpretation with Nacha back in 2023, and they said, “of course.”
But let’s face it, all too often banks rely on origination agreements, providing their customers a 700+ page book of rules, training at onboarding, and online explanations of Rule changes as the extent of their responsibility.
This has not pleased Nacha, as we learned when we interviewed Jordan Bennett in a webinar (available here). He stressed that ODFIs warrant the compliance of each Entry originated through it to the Network, that ACH usage evolves as organizations change over time, that agreements and Rules access don’t fully discharge the ODFI’s responsibility for that compliance, and that Nacha is raising fines so that they’re both too much to pass to a customer and too high to be treated as the cost of doing business.
So then, with the New Rule, Nacha codified its earlier call for “all participants” (or at least all non-consumer participants) to play a role. The New Rule doesn’t begin with “Each ODFI” but rather with “Each non-consumer Originator, each Third-Party Sender…
Nacha is clearly signaling that they’re serious about the “all participants “ emphasis, they’re serious about the need for the customer to manage their fraud risk, and they intend to enforce it. “Enforce it” means they’re looking to you for records demonstrating that your customers are meeting the New Rule requirements. Make no mistake: it’s your responsibility for your customers’ compliance they’re intending to enforce.
So how can you effectively recruit your customers into the risk management framework? And once successful, how can you demonstrate that your customers are compliant, and that you’re exercising your Article 2 responsibility? The team at Lexalign is here to help. Lexalign hosted a webinar with Nacha recently, where we covered the entirety of this New Rule and explained how to use our solution to help you demonstrate your customers’ compliance. And we’re here to help!
Download the Checklist below to learn more about how you can be ready for the New Rule by March 2026.
What the Nacha Fraud Monitoring Rule Really Means (and Why Banks Can’t Ignore It)
Nacha’s new Fraud Monitoring Rule is poised to take effect (i.e., becomes enforceable) for your higher-volume Originators/TPS on March 20, 2026, with universal applicability beginning June 19, 2026. While it’s tempting to focus on what that means for the bank’s internal risk monitoring, the Rule actually starts with “[e]ach non-consumer Originator [and] each Third-Party Sender…must…” Under the General Rule (2.1), Nacha holds the bank accountable for those customers’ compliance.
How are you going to demonstrate customer compliance by the applicable deadline? Don’t fret: there is a way. Here’s what to know…
The New Rule marks a significant shift: fraud prevention now officially begins at the point of origination. Transaction monitoring at the bank–while important–is not sufficient for compliance. We have to sensitize and empower the customer to manage their fraud risk.
What the New Rule Requires of Customers
- Phase 1 (March 20, 2026): The Rule is enforceable as to non-consumer Originators and Third‑Party Senders (TPS) that originated more than 6 million Entries in 2023.
- Phase 2 (June 19, 2026): Enforceability extends to all remaining Originators and TPS.
- The Rule requires these customers to implement “risk-based processes and procedures…that are reasonably intended to identify Entries that are suspected of being unauthorized or authorized under False Pretenses,” and to review the adequacy of those processes and procedures annually.
- “False Pretenses” are defined as “the inducement of a payment by a Person misrepresenting (a) that Person’s identity, (b) that Person’s association with or authority to act on behalf of another Person, or (c) the ownership of an account to be credited.”
Why Current Tactics and Legacy Tools Are No Longer Sufficient
- Nacha’s own Credit-Push Fraud Monitoring Resource Center underscores that the rule requires that non-consumer Originators and TPSs establish and implement risk-based processes and procedures to identify Entries suspected of being unauthorized or authorized under False Pretenses.
- Nacha’s Risk Management Advisory Group (RMAG) also emphasizes that simply doing nothing is not acceptable—risk monitoring must be meaningful, documented, and operational.
- Finally, RMAG encourages banks to “look for opportunities to automate,” and to see what vendors offer that can meet the new fraud monitoring requirements.
No Liability Shift for ODFIs
While the rule shifts attention to the originators and third-party entities, liability remains squarely with the ODFI (as in our recent interview of Nacha staff), as the ODFI warrants the compliance of each Entry, and is responsible for its Originators’ and TPS compliance. Nacha makes clear that origination agreements or attestations do not absolve banks of responsibility.
Where Lexalign Fits In
Lexalign operationalizes customer-level compliance. We enable:
- Guided fraud monitoring assessments for customers, aligned with Nacha’s Rules.
- Tailored gap analyses, action plans, policies and remediation checklists that empower customer compliance.
- Visibility for banks into the compliance posture of 80%+ of customers (compared to–at a high end–25% with manual alternatives), with scoring and analysis that enable targeted, efficient risk management before something bad happens.
- Automated records—including dashboards, data and reports—that demonstrate alignment with Nacha’s Rules and other regs and FFIEC Guidance, so that even when fraud does occur, you prevent it from getting much worse.
- Fraud-related litigation risk mitigation: customer audit reports designed to protect the bank from liability under pertinent statute.
What Can Be Done?
March 2026 is coming fast—and with it, Nacha’s enforcement begins. Banks that overlook operationalizing customer compliance may face fines, regulatory scrutiny, or worse. Lexalign is actively helping banks build their 2026 plans to comply with the new rules, helping them fortify the frontline, stay audit-ready, and uphold their institution’s standards. We’re booking launch slots now. If you’re interested in demonstrating customer compliance in March, do not delay reaching out to us.
Looking to do the same? Let’s talk.
Learn more about how Lexalign equips banks to meet Nacha’s new Fraud Monitoring Rule in our on-demand webinar.
The Missing Piece in Fraud Prevention
If you ask an AI agent to provide an overview on fraud, the agent surveys the current content and generates content. It will accurately tell you that trends to watch include AI-Powered Social Engineering; Identity Theft and Synthetic Identity Fraud; Real-Time Payment (RTP) Fraud; and Supply Chain Fraud [impersonating vendors]. But then in telling you how to manage fraud, it clearly isn’t connecting the dots. What connects all those trends is something Nacha, the organization that governs banks’ and their customers’ use of the $86T ACH Network, has been talking about for years: the rise of Credit-Push Fraud (CPF).
Credit-Push Fraud occurs when malicious actors exploit gaps in organizations’ sophistication or operations to access their deposit accounts and then push out deposits to fraudulent accounts, from which the funds are quickly transferred, in order to prevent claw backs. By “organizations” we mean customers of banks that banks permit to initiate fund transfers (business payments, Wires, ACH, etc.). It’s those customers that are the targets and victims of social engineering, identity theft, RTP fraud, and vendor impersonations. CPF is rapidly evolving as fraudsters learn new techniques to dupe customers or penetrate their systems, and rapidly move funds. But the key piece that’s missing in the conversation is: how do we shore up those gaps in customers’ sophistication and operations?
It’s bank customers – organizations like your local school district, doctor’s office, pet supply store….all of them, without differentiation by sector, size or geography – that are now the frontline of fraud prevention. To fraudsters, they’re the front door of the bank, and we need to focus on the customer to close that door.
What is Credit-Push Fraud?
In 2022, Nacha said a new type of fraud had eclipsed debit fraud as the predominant threat to bank account holders. Debit Fraud involves debiting funds from a customer’s or organizations’ bank account without obtaining proper authorization from the account holder. For a long time it was Nacha’s main focus, and most of Nacha’s Rules and official Guidelines address this fraud. Many of the tools the industry developed for fraud prevention were designed for debit fraud, including transaction monitoring, measuring return rates, etc. Those are still important tools (debit fraud still exists), but fraudsters have adapted.
In 2022, Nacha said:
Now, however, the most significant fraud threats to bank account holders involve fraud and scams that result in money being sent out of their accounts using credit payments, including ACH credits, wires, cards, and other instant and digital payments.
They said this in an article titled, “A New Risk Management Framework for the Era of Credit-Push Fraud,” as Credit-Push Fraud (CPF) is the name for this new, pernicious trend. In the article, Nacha said that our old Framework (including those solutions mentioned above) don’t work for CPF, as fraudsters have developed techniques to circumvent them (such as masking credits to look like a customer’s normal practices). To deal with this new fraud, Nacha said we needed to evolve in two key ways:
- Better information sharing (and more information)
- “All participants” in payments must work together
To combat this fraud, we need to focus on the bank customer as the target and primary victim. For proactive fraud prevention, we both need information about their sophistication and operational gaps, and we need them to assist in monitoring for it. In other words, we need to empower the customer to be the fortified front line against fraud, while obtaining data about their operations that banks can use proactively to identify points of high risk across their customer networks.
What’s an example of Credit-Push Fraud?
There are many ways fraudsters exploit organizations’ gaps in sophistication and operations to access their deposits. As listed above, they use social engineering (phishing, vishing, etc.) to steal banking credentials, they pose as employees or vendors requesting payment to “a new bank account,” they impersonate managers (such as via business email compromise, or BEC), and increasingly use AI-generated voices for all of the above. They also use old-school penetration and account takeover. Here’s a classic (and true) example:
Fraudsters hacked into an organization and watched their payment routines. As soon as the CEO left on vacation, the fraudsters sent an email in his name to the CFO (business email compromise) saying, “My wife and I have gone on a cruise, but I need you to transfer some funds for an acquisition we just made, in three payments of $700,000 spaced one week apart. You can’t reach me, but I’ll be checking in.” Not catching the pretense, the CFO followed through.
To the bank, these were valid payment orders from their client, and the amounts and cadence were not extraordinary for the organization. By the time the CEO checked in, over $2M had been sent through a series of foreign bank accounts and was lost.
It wasn’t the bank’s mistake, but the customer, facing ruin, blamed the bank and threatened a lawsuit. Facing the prospect of reputational harm and loss of an important customer, the bank covered much of the loss.
It’s important to note: this could all have been avoided if the customer had the right practices in place—verification and dual control, not to mention training on social engineering techniques used by fraudsters.
Net effect: fraudsters take advantage of gaps in customer sophistication and processes that are invisible to their banks.
Do you have a strategy for Credit-Push Fraud?
It’s critical for your bank to begin to ask: how do we sensitize and empower customers to manage the risk of their operations, and enable bank staff to manage that remote operational risk in a proactive, targeted, efficient and effective way? As you go through this journey, Nacha’s Credit-Push Fraud Monitoring Resource Center offers relevant content and links to providers that help with these issues. Among them, Lexalign is uniquely focused on recruiting the customer into Credit-Push Fraud prevention.
To learn more about Lexalign’s role in fraud prevention, schedule a demo here.
A Practical Look at the New Nacha Fraud Monitoring Rule
A Practical look at the New Nacha Fraud Monitoring Rule
Reflecting on the Importance of the New Fraud Monitoring Rule
Co-written by Aliya Haider and Trevor Lain
Imagine walking into a bookstore and trying to find where this topic lives. Is it in the finance section, next to books on strategy? Or is it over in true crime, with stories of social engineering and fraud? Or maybe it belongs in technology and cybersecurity, where code meets crime.
The truth is, fraud risk and compliance today touch all those shelves at once. It’s about financial operations, human behavior, and evolving digital threats—all converging in ways that make Credit-Push Fraud one of the fastest-growing financial crimes.
That’s why context matters. The new Nacha Fraud Monitoring Rule isn’t just another compliance update buried deep in a rulebook. It’s a response to shifting fraud patterns that every financial institution, every business, and every participant in the ACH Network needs to understand—because it sits at the intersection of finance, technology, and trust.
Fraud Is Evolving – and Fast
In financial services, fraud never stands still. Over the past decade, financial institutions invested heavily in reducing debit fraud. Those efforts worked. But as controls tightened, criminals adapted, shifting their focus to a type of fraud that is harder to detect and even harder to recover from: Credit-Push Fraud.
Credit-Push Fraud happens when criminals convince a legitimate account holder to authorize a payment under false pretenses—often through schemes like Business Email Compromise (BEC). The transaction looks legitimate because the account holder “approved” it. By the time the fraud is discovered, the funds are often long gone, having passed through multiple accounts, often across international borders.
For businesses and their financial institutions, these schemes are devastating. Fraudsters target operational vulnerabilities like remote work environments, insufficient dual controls, and employees unfamiliar with intrepid social engineering threats. The result is not just financial loss but also customer distrust, reputational damage, and potential litigation risk for financial institutions.
The Regulatory Response – A Call Upon All Participants
Years ago, recognizing these emerging threats, Nacha took action. In 2022, it called for “a New Risk Management Framework” to strengthen fraud resilience across the ACH Network. A key principle of that framework was simple but profound: fraud prevention is no longer just the FI’s job—it’s everyone’s job.
The ACH Network is vast, and its participants include banks and credit unions, Third-Party Senders, Originators (often businesses), and service providers. Fraudsters exploit the weakest link in this chain, and often that weak link is not the FI itself but the business customer, who controls the security and compliance of its ACH originations. Nacha’s answer: bring those customers into the fraud prevention effort explicitly.
The New Nacha Fraud Monitoring Rule
The new Fraud Monitoring Rule (Subsection 2.2.4) requires non-consumer Originators and Third-Party Senders to establish and implement risk-and role-based processes and procedures to identify unauthorized or fraudulently induced transactions and review and update those processes at least annually to adapt to evolving fraud risks.
This rule isn’t just regulatory housekeeping. It represents a strategic shift: fraud monitoring is now a formal duty for parties beyond the bank. Every participant has a defined role in spotting and mitigating fraud.
Banks Still Hold the Ball
For banks, particularly Originating Depository Financial Institutions (ODFIs), this doesn’t mean liability is shifting away. In fact, Nacha has made clear that the new rule does not change the ODFI’s fundamental responsibility for transactions originated through its systems. Banks must still ensure their customers—Originators and Third-Party Senders—comply with Nacha’s rules.
The implication is clear: financial institutions need visibility into their customers’ compliance practices and must verify that customers have appropriate fraud monitoring controls in place. Relying solely on contractual agreements or one-time onboarding assessments isn’t enough when fraud patterns evolve so quickly.
Why Now, Who Cares?
The answer is straightforward: because fraud has changed, and the rules must follow. Credit-Push Fraud attacks take advantage of operational gaps at the business customer level. Nacha’s rule closes some of those gaps by ensuring that all non-consumers upstream of the ACH Operator are actively monitoring for fraud.
For FIs, this means moving beyond minimum compliance toward proactive oversight of customer operations. Tools like automated compliance self-assessments, remote customer risk scoring, and self-guided fraud monitoring programs are becoming essential.
This isn’t just about checking a regulatory box. It’s about protecting the integrity of the ACH Network, safeguarding customer trust, and reducing systemic fraud risk.