Sometimes a check that has had a stop payment order applied is returned as an ACH. Are we obligated to place an indefinite hold on the ACH and are we required to report this to the consumer. We currently do not notify the customer of the ACH conversion and subsequent stop hold?

When I managed an ops area for a credit union, our process for placing a stop payment on a check evolved to include placing the same stop payment on the ACH side. They only signed the check stop payment form and paid the one fee - since technically you're only stopping the check transaction.

Our core processing system had a field for "check number" for the ACH side as well. Which meant that if you placed a stop payment for check # 2101 for the amount of $211.90, the stop would be effective on both the ACH and check processing side.

We did not notify the customer of the ACH stop hold or anything like that. We pretty much just took the stop payment order from the customer and ensured that the check would not be paid, whichever channel it came in through. I don't believe there is any requirement to tell the customer that his check might be presented via multiple channels.

Our system also allows us to stop an item as both Check and ACH. Both sides do expire at 6 months, though, and we tell our customers that.

On the ACH side wouldn't you have to leave the stop on until --withdrawn or until the debit entry is returned?

I believe that is correct, since it's an ACH debit the new rules effective March 19, 2010 state; "The stop payment order shall remain in effect until the earlier of 1)until written notice is received from the account holder to revoke the stop payment order 2)until payment of the entry has been stopped".

Depends on whether the account is a personal or business account and the type of transaction being stopped.

I'll go back to my post and note here that that change did not affect business accounts.

Sorry, thought we were talking about just consumer accounts.

I understand the new NACHA rules and Reg E to also say that stop pays on recurring ACH debits must remain in effect for as long as entries covered by the stop order could be received (forever?)

All other ACH debits would be subject to the earlier of payment stopped or withdrawal.