Redmont – April 13, 2025 – A new automated clearing house (ACH) system from The Clearing House is rolling out, promising to modernize interbank transactions. This development arrives at a crucial time, especially given the recent liquidity issues experienced by Vanguard National Bank. While some systems used to exist, the Clearing House’s approach emphasizes automation and direct cash-backed security, hoping to achieve better scalability and prevent bottlenecks.
ACH Explained
An ACH system handles electronic payments like direct deposits and online bill payments. The Clearing House’s system aims to automate these transfers, making them more efficient and reliable. The core feature is that every transaction is backed by verifiable cash reserves, adding a layer of security.
How It Works
The new system allows for direct, automated communication between banks using standardized routing and account numbers. This aims to reduce manual errors and speed up processing times, removing the need for banks to hold accounts at various other institutions.
Vanguard National Bank’s Liquidity Issues
Vanguard National Bank faced liquidity issues recently, struggling to consistently transfer funds to customer accounts. One contributing factor was the manual delay of their staff, unable to transfer funds internally to Vanguard Clients and other banks. This event highlighted vulnerabilities in the existing transfer methods.
How This System Could Have Helped
The Clearing House ACH system could help prevent future liquidity issues. By automating and speeding up transfers, it ensures banks can access funds quickly and reliably fulfill customer requests. The cash backing provides additional security.
Early Adopters: Bank of Reveille (BOR) and The Exchange
Bank of Reveille (BOR), known for its traditional, cash-focused approach, and The Exchange, a digital platform, are among the first to adopt this new system. This demonstrates the system’s wide-ranging compatibility.
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Bank of Reveille (BOR): BOR charges $100 for outbound ACH transfers and $25 for incoming ones. A rejected transfer results in a 50% fee retention. They identify accounts as “1” for Cheque and “2” for Company.
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To initiate a transaction reach out to account officer. Provide Routing Number / Account Number / Inbound or Outbound. After that await confirmation from your bank.
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The Exchange: The Exchange, a digital platform, has integrated with the Clearing House ACH Network, letting users transfer directly from their platform balance to participating banks. The Exchange is currently waiving fees in the beta phase. The Exchange provides Routing Number
1129773799. Transaction approvals are subject to the recipient banks own systems and processing times.
Vanguard National Bank’s Current Status
Vanguard National Bank is currently integrating with The Clearing House’s ACH system. The bank hopes to leverage the increased efficiency and security to address previous issues and restore customer confidence.
Insights From the Involved Parties
We reached out to representatives from The Clearing House and Bank of Reveille to gather more insight into this new development.
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The Clearing House (Nimq_, CEO):
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While declining to comment on the specific security measures, Nimq_ indicated that The Clearing House ACH system has been designed to handle hundreds of transactions per second.
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“The system supports multiple currencies already,” Nimq_ stated. “We are initially rolling out in Redmont, and later expanding to places with demand for ACH, such as Alexandria, and elsewhere internationally.”
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Nimq_ also stated that while there are documentation on transaction flows through the API, Nimq_ provides direct customer support to partner banks if needed. “We aim to stay neutral indefinitely and are expecting most banks to join the system,” Nimq_ said about their scaling plans.
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Bank of Reveille (Nacholebraa, Director of Public Relations):
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“The Bank intends of drafting some graphics to help explain the thought process on how to utilize transactions through the new ACH transfer portals,” Nacholebraa explained. “However, we are not changing much of the process. You will still work with your Account Officer to begin the transfer and indicate accordingly to them.” BOR also stated the original details in the initial announcement, which entails reaching out to the account officer to initiate
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“Transfers bank to bank will 100% be improved. As most know BOR operates off a traditional paper trail. This takes out the need for us to be in-game to conduct a transfer. As for cost, not much of a cost change for our clients” - said Nacholebraa
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“BOR has a 5 stage vetting process for employees and contractors. We reviewed the security protocols within ACH before launch. As for our own security protocols, we have always limited the information permitted to staff within the company. Employees have the information they need to conduct their jobs nothing more nothing less.” - Nacholebraa detailed when asked about security measure implemented.
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Regarding the audit of staff conduct, Nacholebraa stated: “Transactions are reviewed randomly on audits. Management tends to conduct around 4-5 audits a week depending on the activity of the Bank. Should irregularities populate we correct and move forward and explain the error to the employee respectfully. We have prided ourselves of not having any issues thus far in our 2 years of operations.”
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“Makes way for our expansion into Alexandria as well as provide a platform for some quality of life enhancements moving forward.” Nacholebraa said about the future and opportunities with the new system.
What This Means for You
The Clearing House’s ACH system has the potential to improve the speed, security, and reliability of interbank transfers. It could lead to faster access to funds, fewer delays, and greater confidence in the financial system.
Quotes from Key Players:
- Nimq_, CEO of The Clearing House: “Our goal is to ensure reliability and security with cash-backed transactions, accommodating both traditional and modern banking systems.”
- Nacholebraa, Director of Public Relations of Bank of Reveille: “Our collaboration with The Clearing House Company reflects our ongoing mission to drive innovation and integration in the financial community, making banking more efficient and accessible for everyone.”
- Nexalin, CEO of Vanguard City Bank: “I think this is very well done and I commend you on the work for this service”