Katie BaileyThe U.S. Supreme Court has declined to hear an appeal in a case involving a Virginia credit union, leaving in place a favorable ruling for financial institutions nationwide.
The decision upholds the Fourth Circuit Court’s finding that financial institutions are not liable for processing Automated Clearing House (ACH) transfers when account numbers match but names do not, unless there is actual knowledge of fraud.
This outcome prevents an unnecessary burden that would have required credit unions and banks to manually review every name mismatch on incoming payments, a process that would have consumed significant resources and shifted liability within the payments system.
While this marks a win for the credit union involved, it also represents an important victory for all credit unions by maintaining reasonable standards for ACH processing and preserving efficiency across the financial system.
