Webinar Key Takeaways: Nacha Rules & Compliance for Higher Ed

Our recent webinar, hosted with Bluefin, on Navigating Nacha: Rules, Policies, and Compliance Strategies for Higher Education, featured insights from Ruth Harpool, CampusGuard Treasury Solutions Advisor and Nacha ACH Network Advisory Board Member, and Ruston Miles, Founder and Chief Strategy Officer at Bluefin.

The discussion highlighted how evolving Nacha ACH Rules impact the higher education sector, offering critical strategies for managing ACH transactions securely, reducing fraud risk, and ensuring institutional compliance.

Higher education institutions remain prime targets for cybercriminals because they collect vast amounts of sensitive data, including tuition payments, Personally Identifiable Information (PII), and Protected Health Information (PHI).

With the average cost of data breaches in higher education topping $3.7 million, and ransomware attacks increasing by 70% year-over-year, prioritizing ACH compliance is critical. Remember, ACH compliance is not just about moving money correctly; it’s about protecting sensitive data like payroll accounts, student refunds, tuition payments, and donor information. What is exchanged across the network is sensitive data, not just financial transactions.

The ACH network functions as the “circulatory lifeblood system” across campus, touching everything from student refunds, financial aid, vendor payments, dining plans, and donor information. Common ACH transaction types on campus include tuition, refunds, payroll, donations, and vendor payments. Because the network touches so many departments, universities often use multiple software tools (like bank-centric tools or payroll software) to send, receive, and store this data.

Following industry standards, even if not technically required, goes a long way in mitigating penalties and protecting your institution’s reputation in the event of a breach.

Here are the key takeaways focusing on the major Nacha Rule amendments and actionable steps your institution should implement now to secure your ACH environment and stay ahead of compliance deadlines.

Key Takeaways: Understanding the New Nacha Rules

In our webinar, we focused on three major Nacha Rule amendments, signaling a shift toward stronger operational discipline and active, continuous risk governance.

1. ACH Fraud Monitoring Rule (Effective June 22, 2026, for general Originators)
   This rule is part of Nacha’s initiative to combat credit-push fraud, which occurs when fraudsters attempt to push funds from a payer’s account to their own via scams like payroll fraud, student refund scams, or vendor impersonation attacks.

• What it requires: Institutions must implement documented, risk-based processes to detect fraudulent ACH entries continuously.
• Monitoring Focus: Monitoring should incorporate tools for velocity checks, anomaly detection, and behavioral tolerances. Anomaly detection involves flagging behavior that “seems weird,” such as unexpected high volume or changes to bank accounts outside of normal procedure.
• Micro Entries: Special attention is required for Micro Entries (small credits, often under $2) that are used in account verification and could indicate someone outside the treasury group is testing the institution’s bank account.
• Effective Dates: The rule applies to high-volume originators (6 million+ annual transactions) beginning March 20, 2026, and extends to all other Originators on June 22, 2026.
• Proactive Adoption: Adopting this rule now offers proactive risk management, improved fund recovery, and strengthens institutional reputation.

2. Supplementing Data Security Requirements Rule (In effect since 2022 for high-volume originators)
   This rule mandates that certain ACH participants must render deposit account information unreadable when stored electronically, similar to PCI rules for cardholder data.

• Threshold: This rule technically only applies to Originators, third-party service providers (TPSPs), and third-party senders (TPSs) with ACH volume exceeding 2 million transactions annually.
• Why adopt now? Even if your institution is under the 2 million transaction threshold, proactive adoption protects student, donor, and staff financial data. By securing your data, you prevent your institution from becoming the “path of least resistance” for fraudsters.
• Acceptable methods: Deposit account information can be rendered unreadable through encryption, tokenization, truncation, destruction, or secure hosting by a financial institution.

3. Standard Company Entry Description Rule (Effective March 20, 2026)
   This amendment is part of the risk management initiative aimed at reducing fraud and improving transaction transparency across the ACH Network.

• Standardized Language: Originators must use standardized language in the “Company Entry Description” field to clearly identify the payment purpose.
• “PAYROLL”: Must be used for PPD Credits (payments from a business to a person) that represent wages, salaries, or similar compensation. This descriptor aids Receiving Depository Financial Institutions (RDFIs) in improving fraud detection and funds availability logic. This may include contractors expecting payroll-like treatment, although those paid through accounts payable typically should not be moved.
• “PURCHASE”: Must be used for web debit entries authorized by consumers for online purchases of goods. It does not apply to services, such as tuition and fees, or to CCD credits used for B2B transactions (like vendor payments or accounts payable). The effective date for this rule is March 20, 2026.

Actionable Steps for Compliance and Risk Reduction

Nacha’s direction demands active, continuous risk governance. Implement these steps to ensure your institution is protected, treating compliance like a “seatbelt” that only works if you regularly check it:

1. Develop and Maintain Written Policies and Governance:
   • Create or update written ACH and fraud policies that define the roles and responsibilities for ACH origination within your office.
   • Policies must define data protection standards, data retention policies (especially for ACH data no longer actively being used), and breach reporting procedures.
   • Conduct regular ACH risk assessments to understand the rules you must follow, lay out your processes, and identify exceptions. A one-time assessment can be valuable for laying the framework, even for institutions with low volume.
   • Conduct regular audits and yearly training to remind staff about ACH, how fraud happens quickly, and update them on policies and procedures.
2. Proactively Monitor for Fraud:
   • Fraud monitoring should be continuous, not performed just once a year.
   • Use ACH transaction monitoring tools or dashboards to flag anomalies, such as unanticipated volume or changes in behavioral patterns (e.g., student accounts updating at odd hours).
   • Pay close attention to behaviors that “seem weird” and connect monitoring to Business Email Compromise (BEC) prevention programs.
3. Secure Stored ACH Data:
   • Proactively render deposit account information unreadable using encryption or tokenization, even if you do not meet the 2 million transaction threshold.
   • Ensure that all environments where bank account information resides, including primary databases, backups, and storage, are secured to meet “unreadable data” standards.
   • Tools like Bluefin’s FileGuard can encrypt Nacha data in databases and files using tokens that fit into legacy systems.
4. Coordinate with Partners and Verify Compliance:
   • Security is a shared responsibility between the institution, its banks (ODFIs), and trusted vendors.
   • Coordinate with your partners to ensure compliance with Nacha requirements.
   • If utilizing a third-party service provider (TPSP) for ACH processing, you must trust but verify that they comply with all necessary rules, including the web debit rule and the supplemental data security rule. Document their roles and responsibilities in your agreement.
   • Trusted partners like CampusGuard offer comprehensive Nacha/ACH risk assessments, while Bluefin’s ShieldConex and FileGuard platforms provide essential security and data protection tools.

Next Steps & Resources

For institutions seeking to strengthen their governance and compliance, CampusGuard focuses on assessment and governance, while Bluefin provides the technology to secure and store data.

Access our ACH Assessment Benefits Guide and stay informed of important updates to the ACH Fraud Monitoring Rule. Contact us for further guidance on Nacha and ACH requirements or to get started with an ACH assessment. Our team of experts is here to help!