M&T Bank : NACHA Company Name Rule Change
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NACHA Company Name Rule Change


Beginning June 20, 2008, the “Company Name Field” associated with each ACH transaction must contain a name by which the Originator or ultimate payee or payor is known and readily recognized by the Receiver.

Effective June 20, 2008, the NACHA Operating Rules (“Rules”) will require Originators to more clearly identify themselves or the ultimate payees or payors of each ACH transaction they initiate. Specifically, the rule clarifies:

  1. How an Originator must identify itself within an ACH record, and 
  2. If the Originator is not the ultimate payee or payor of the transaction, that the ACH record must clearly identify the ultimate payee or payor

By specifically requiring that the Originator or ultimate payee or payor be identified in a recognizable way, NACHA hopes to reduce the number of erroneously returned ACH transactions. Receivers are more likely to claim that transactions are unauthorized if they do not recognize the party debiting or crediting their accounts (for example, if the Company Name Field contains telephone numbers, descriptive statements or names unknown to the Receiver rather than the marketing name the Receiver recognizes).

NACHA anticipates that the new requirement will allow Receivers to more easily determine whether transactions are authorized. This will benefit Originators, payees and payors because fewer transactions will be mistakenly returned.

The Company Name Field is found in the batch header record (type 5) field, positions 05-20. This sixteen character alphanumeric field is mandatory. The data in this field flows with the transaction and is one of the fields that is reflected on a Receiver's account statement.

Again, this important change will require the Company Name Field to contain a name by which the Originator or ultimate payee or payor of a transaction is known and readily recognized by the Receiver of the entry. This name could, for example, be the Originator's, payee's or payor's DBA name or “trading as” name. The inclusion of a readily recognizable name will better enable Receivers to identify transactions that appear on periodic statements, and should reduce the number of returned ACH entries.

M&T Bank wants to make sure that the Company Name Field for all files it sends into the NACHA network complies with these new requirements. Accordingly, for a limited time, M&T's system will analyze ACH files you send for origination to identify certain potential compliance issues relating to the Company Name Field. If we identify such an issue, we will try to contact you directly. However, regardless of whether we identify a compliance issue, you are responsible for ensuring that the ACH files you originate comply with the new Company Name Field rule.

To find out more about M&T Bank's Treasury Management solutions, please send us an email, call 1-800-724-2240 to speak with one of our experienced Treasury Management and Merchant Services representatives, or contact your M&T Relationship Manager.

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