We are often asked about the best way to process ACH. Lenders wonder if there’s a provider or integration we recommend. They are usually surprised when we tell them that we have ACH processing embedded in the Nortridge Loan System (NLS). That is to say, our customers do not need a payment gateway or processor to accept ACH. It’s a feature that has been in NLS for more than a decade and has only gotten better over time. We have built into NLS the full ACH lifecycle, including presentment, representment, returns and corrections. We also support the Canadian AFT (US ACH equivalent) using the CPA Standard 005 format.
In NLS, it’s easy to set up ACH processing. Simply create an ACH Header, this is the description of the transmission file with information that your financial Institution will provide you, and an ACH Company (the account to deposit the monies into) in the NLS Setup and then start collecting payments.
Here Is an example of the ACH Header and ACH Company:
After the ACH has been defined, your financial institution will want you to submit the file to them, we can automatically generate the NACHA file and transmit it to them using a security SFTP file transmission. Once the file is transmitted, it will be processed, and if there are any returns, the financial institution will generate a return file, which can be retrieved automatically using SFTP and then process the payment reversals against those posted payments.
Sometimes, the return file will contain change records. NLS can also automatically process those change records that change account numbers, routing numbers, etc. Representments can also be set up to re-transmit returns that are received, back to the financial institution for a representment against the borrower’s account.
Here are some of the options that are available during this ACH processing:
- Creating a rule that automatically re-opens a closed loan when an ACH is returned. This is helpful for loans that are automatically closed when the last ACH payment is processed. What if the payment fails? This simple feature saves time by automatically re-opening loans. Learn more here .
- Allowing for a one-time grace period for the next ACH payment. This feature is one of the enhancements we have rolled out to help our customers expand their payment flexibility business rules due to COVID. A borrower can call in, and your reps can set a grace period, effectively delaying the next ACH payment date. It can also be implemented in an automated fashion by allowing the borrower to go into the borrower portal and ask for a grace period. Learn more here .
- Suspend ACH on a configurable number of returns. This Is helpful to control return thresholds and keep return costs down.
- Automatically revoke ACH privilege on an account that has returns with a closed status.
- Notifications can be configured to send to borrower via email or text that an ACH is going to be processed in x number of days. Also, notifications for successful ACH and returns and representments can be configured.
Lastly, it’s worth noting that our native ACH processing is included in the system’s cost – we don’t charge an additional fee for ACH processing. In my next blog post, I am going to talk about CARD processing.
