We are looking into adding the Stop Payment feature through our Online Banking.

If a customer request a stop payment through our Online Banking, are we required to mail/email a confirmation to the customer?

Also, is there anything in NACHA that we should be aware of regarding to stop payment through Online Banking? Regulation E is not very detailed regarding to stop payments.

Thanks!

The NACHA 2015 Operating Rules regarding stop payment (for consumers) state that a consumer can stop payment verbally or in writing. You can require written confirmation of a verbal stop pay as long as you disclose this requirement. If you require written confirmation, a verbal stop payment ceases to be binding after 14 days.

More info can be found in the 2015 NACHA rules on OR45.

However, it makes no mention of Internet-initiated stop payments, nor does it state whether they are considered the same as a written stop payment (I'm not an expert on all aspects E-SIGN but perhaps following E-SIGN in originating the stop payment order will meet NACHA's requirements).

The UCC governs stop payments. Unless your state UCC says different, a stop payment order only has to be ratified by the customer.

Most UCC versions I have read say something like "A stop-payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in a record within that period."

Note that the verbiage doesn't say the order has to be in writing or be confirmed. It says that an oral order lapses unless confirmed. Oral means spoken, and an order placed via online banking isn't spoken.

Also, since the stop order is a matter between the bank and depositor only, the bank can agree that even an oral order will remain valid without confirmation (although it should make that decision clear to avoid confusion).