NCHA Implements Fed's Enhanced Net Settlement Service Nationwide.

COLUMBUS, Ohio--(BUSINESS WIRE)--Nov. 4, 1999--

National Clearinghouse Association (NCHA) members, through a system designed and administered by the Check Exchange System Co. (CHEXS), became on Monday the first financial institutions to settle transactions across all 12 Federal Reserve districts using the Fed's new enhanced Net Settlement Service.

This new service offers an increased level of automation and same-day settlement finality, which will, according to NCHA, simplify and improve the timeliness of the settlement process for its members.

Buddy Massengill, executive vice president of First American National Bank, an NCHA member, said, "Since 1992, the NCHA has demonstrated that a national net settlement, with same-day finality, is possible. The implementation of the enhanced Net Settlement Service continues to simplify that process with the elimination of wire transfer." Massengill is a past president of the NCHA.

The NCHA comprises 43 financial institutions, including many of the nation's largest banks, with 109 check processing sites and an average daily net settlement amount in excess of $2.9 billion.

"The net settlement service is a welcome addition to the settlement of the NCHA," said Lisa Stimmel, CHEXS administration manager. "This new feature will reduce CHEXS administration's daily efforts in facilitating the settlement of the NCHA."

Developed by the Federal Reserve to meet the growing needs of its members, the enhanced Net Settlement Service reduces the duration of settlement risk by providing same-day finality with book entry settlement. It permits the automated submission of settlement files through an on-line mechanism. It also standardizes processing to facilitate the handling of entries for settlement arrangements that include participants from more than one Federal Reserve district.

The NCHA ranks among the five largest U.S. clearinghouses, and it is the only national clearinghouse with members in all 12 districts. It is also the only national check clearing and settlement service outside the Federal Reserve System.

The NCHA has provided settlement services to its members continuously since its founding in 1992. Through CHEXS, its service provider, the NCHA offers financial institutions a cost-effective private-sector alternative for national cash letter clearing and settlement.