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 stands as the ONLY Nacha Preferred Partner that 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.