U.S. Central was caught up and running its APEX ACH system in real time as The Credit Union Journal was going to press, but natural-person credit unions were still bracing for a flood of bounced checks after a glitch at the corporates' corporate left 2,200 credit unions unable to post ACH transactions for about 48 hours early last week.
The problem first showed up April 4 when transactions from late in the day on April 2 were being processed in preparation for regular business on April 5. A line of code in the software that neither U.S. Central nor its vendor, ACI Worldwide, Omaha, Neb., knew about placed a limit on the number of batches any financial institution could process, and that "unknown limiter" triggered a shutdown of the entire system. Of the 29 corporate credit unions, 25 are on U.S. Central's APEX ACH system with a total of 2,200 natural-person credit unions affected by the service disruption.
"We had a lot of batches, but the size of the files was no bigger than usual. But this bug in the software triggered the system to shutdown mid-process, and that corrupted the files from (April 2)," said Bob Amundson, SVP of correspondent services at U.S. Central. "When we brought the back-up online we discovered that due to operator error, the backup was also corrupted. We spent all day Monday and the first half of Tuesday on the recovery of data. Once the data was recovered, that allowed us to take corrective steps to bring the system back online."
At press time, the only backlogged files at U.S. Central were those that were warehoused from April 2, and U.S. Central's Roger Dick reported those files were being processed and were expected to be complete by midday April 8. "We are currently processing under normal circumstances now, and once those warehoused files are through the system, absolutely everything will be back up to date," he said.
But that won't happen in time to save potentially hundreds of thousands of credit union members from bouncing checks all across the country.
"My concern is all the bounced checks," said John Santarpia, CEO of Community First CU, Mulberry, Fla. "We know we are going to end up returning a number of our members' checks, and we haven't been able to be proactive about telling our members about this situation because we haven't been getting enough information from Southeast Corporate. I know Southeast is like the meat in the sandwich, they're hearing from us and then they're hearing from U.S. Central, but this is ridiculous."
And while credit unions can honestly tell their members that it's not their fault, that's not a particularly useful or helpful response, he noted. "We want to tell them the truth, but we can't do that if we can't get answers from our corporate, and it seems like Southeast simply isn't asking the right questions, the tough questions of U.S. Central," Santarpia suggested. "It's our reputation that's on the line. Our members don't care about Southeast Corporate or U.S. Central. They want their money. And they will get it. We will make our members whole, and Southeast has said it will make us whole. We will write whatever letters to creditors and vendors our members need us to write. But that doesn't save them from the initial embarrassment of writing a bad check, that doesn't save them from the hassle of getting it all resolved."
In an effort to continue providing the most convenient service possible to its members, the $102-million credit union was paying its members based on their paystubs, something that normally would have just gone through as direct deposit transactions. But Santarpia said he is concerned that "being made whole" may or may not include all of the costs his 11,500-member credit union will incur in the process of doing so.;
"We want to make sure that no natural-person member incurs any cost as a result of this, we will make our members whole and our members will make their members whole," Dick commented. "We will make sure that any cost that would trickle down all the way to the natural-person member is covered."
U.S. Central has been on ACI Worldwide's system since 1998 and experienced no major problems until now. Ironically, the corporate's corporate decided even before the system outage that due to its rapid growth in the ACH arena it would switch vendors and will be working with eFunds later this year.
In the meantime, U.S. Central is discussing with ACI Worldwide how it can further automate the back-up system to eliminate the risk of "operator error" causing corruption of critical back-up data.
