The National Automated Clearing House Association is moving to improve its organizational structure and rule-making processes in an effort to raise member's opinions of the association.

The Herndon, Va.-based trade group, which sets operating rules for ACH payments and promotes ACH usage, spent more than a year creating the new rules and structure, which revise a mission statement made in 1991.

"We need to change the perception that we are a slow, bureaucratic organization and that we move too slowly. That's being worked on with the new rule-making process," said Andrew L. Higgins, a senior vice president of Barnett Banks Inc., Jacksonville, Fla., who will take over as NACHA's chairman next June.

One of the more noteworthy changes lies in the way NACHA plans to adopt rules changes.

On average, the association receives 20 proposals for rule changes a year.

But since the board historically voted on these suggested new rules only once a year, some proposals could sit for several months before even being considered by NACHA.

To remedy this situation, the NACHA board will now vote on new rules four times a year.

As a result, NACHA's constituents, which include 29 regional clearing houses, 10 single-bank associations, and Visa U.S.A., can expect quicker responses to their needs.

Under the old framework, rule-making "could be a multiyear process. In today's environment, that's unacceptable," said Sam S. Cerverizzo, who is acting chairman of the association and senior vice president of Chemical Banking Corp. in New York.

Mr. Higgins gave a more blunt assessment of the situation.

"I think our cust6mers and our stakeholders felt that NACHA didn't move fast enough," Mr. Higgins said.

"Others would try and jump into areas where we were not moving."

Another change in operating procedures enables the association's various committees, including the rules and operations Committee, to allow corporate members to vote.

More than 300,000 corporations use the ACH. These have long clamored for a stronger voice in rule-making, observers said.

"We got a lot of feedback from corporations that the process as far as they could tell was not working very well," said Elliott C. McEntee, who is NACHA's president and chief executive. "They would request the banking industry to support a new product, but it would take a long time to develop the rules to support the product."

NACHA's new action plans will also address its organizational structure.

Though NACHA officials declined to elaborate on what changes will occur in this area, they spoke freely about the need to change the current structure.

"Frankly, I don't believe our current structure can support our future growth," Mr. Cerverizzo said.

"As we continue to expand into other areas of responsibility, and as we continue with the rapid changes taking place in the payments industry, we need to be more agile in our ability to respond."

Part of the goal of the reorganization, according to Mr. Cerverizzo, is to coordinate NACHA's activities with those of other associations involved in similar activities.

"We want to be sure that we can surround the entire payment network, not just NACHA," Mr. Cerverizzo said.

Overall, the action plan aims to meet the future needs of ACH network users.

To this end, Mr. McEntee noted several developments in the new products and services arenas.

Among these is NACHA's Cross-Border Council, which consists of several dozen banks and corporations both foreign and domestic.

The council was formed to address issues related to exchanging payments outside the United States.

The council has introduced a service concept called Gateway Operator, a potential revenue earner for a bank, where so-called gateway banks would act as funnels for foreign exchange conversions and settlements.

In other new product developments, Mr. McEntee said the association was close to signing a vendor contract that would give community banks an affordable entree into financial electronic data interchange.

"We want to be sure that the ACH network meets all the future needs of financial institutions, and we are looking at consumer initiated bill payments, cross border payments, and electronic checks," Mr. McEntee said.

"Electronic checks" allow for check truncation at the point of sale.

In check truncation, magneticink data is captured electronically at the point of sale and then transmitted with transaction data over the ACH.

Mr. McEntee said such a system could significantly change the way billions of checks are collected.

The NACHA board has attached a high priority to the program, and the association plans to bring bankers and retailers together to conduct preliminary research.

"There is nothing technologically to prevent us from doing this quickly," Mr. McEntee said, "but we have to make sure that we've identified all the major problems and addressed them."

Incoming Chairman Is Bank Processing Veteran

Andrew L. Higgins, the newly elected chairman of the National Automated Clearing House Association, can boast of 25 years' experience in the banking and bank data processing industries.

The 55-year-old executive, who will begin a two-year term as NACHA chairman in June, came to his current position at Barnett Banks Inc. in Florida via Southeast Banking Corp., where he was vice president for planning.

He has also held jobs with Electronic Data Systems Corp. where he was responsible for bank data processing operations, and Payment Systems Network Inc., a regional automated clearing house based in Orlando.

Mr. Higgins will succeed as chairman Sam S. Cerverizzo, senior vice president of Chemical Banking Corp., New York.

NACHA, based in Hem don, Va., represents about 40 major banks and regional clearing houses and sets reform rules and standards for clearing house network transactions.

The association currently processes 2.6 billion transactions a year. More than 14,000 financial institutions and 300,000 corporations use its network.

As chairman of the national umbrella group. Mr. Higgins said, he will attempt to build upon strides NACHA has already made in improving risk management and streamlining the rulemaking process.

He will also look for new ways to carry out the association's recently completed strategic plan to provide better service to its members and to be the leader in the development and use of electronic payment systems.

"I'm excited about the strategic plan, because not only are we working on enhancing the ACH, but on some of the other payment areas, such as electronic data interchange, bill paying, and cross-border activities," Mr. Higgins said.

Elliott C. McEntee, the clearing house group's president and chief executive, described Mr. Higgins as "dedicated" to electronic payments and a big promoter of the clearing house network.

"We're excited that he will be the next chairman," Mr, McEntee said. "Andy's experience on the executive committee and as former chairman of Payment Systems Network will assist NACHA and its members in carrying out our mission."

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