Banks implement Check 21 starting Thursday

AP ^ | 10/28/4

[Hurricane Andrew]

Checks are processed by the Federal Reserve, not the banks!

That is incorrect. The Federal Reserve processes some checks, but not all. Many banks, especially those close to one another and virtually all large banks have "direct presentments", in which they bypass the clearing agents. Also, many community banks (such as the one I work for) share regional data-centers that act as mini-clearinghouses. There are also larger regional clearinghouses that bypass the Fed. Part of the reason is that the Fed is generally the most expensive of the clearing mechanisms available.

[maui_hawaii]

I am glad to have a small community banker here to help us big bad evil bankers out :o)

Small or big, banks are businesses. We are not doing things as a public service as many want it done. True we are regulated, but that doesn't make us public property.

Small or large we are entrepreneurs.

All in all though, Check 21 will be good for large and small banks, and will better serve the public at large, including your customers and mine.

[blackdog]

And thus every check I flew was a fed system document. I had just assumed that since the delivery vans met the plane with bags marked for each fed city that it was how they processed everything. Kind of like the Federal Express model.

I guess you are saying those vans also would make local stops after the planes were met with the bags routed for local banks? Makes sense. I guess that's why when you pay your bills for satellite television or credit cards, the PO Box is not too far away even though the company is? I guess they maintain PO Box's and an agent in every region in order to speed up the processing time at minimal expense.

[dirtboy]

Its not a large bank nothing. Its the way banks in general work.

The attitude is what I'm talking about. When you say that's just the way it is, that's the way the large banks have made it - and then they wonder why they have a hard time holding on to their customers.

[maui_hawaii]

Again, you are complaining about the historical development of the largest and most advanced banking system in the world...

Big banks upped the bar so small and large and all sorts of banks can provide better service and to deregulate their own industry.

[Hurricane Andrew]

blackdog,

You got it. Also, there are a significant number of checks that never need to be flown anywhere. For example, checks that are drawn on and deposited or cashed in other banks that use the same data center that my bank uses are cleared via ground courier runs from the member banks to the data center. They probably account for about 25% of our check volume. Many of the larger banks have very sophisticated models on which checks to send where for clearing based on the routing information. It really is a science.

[dirtboy]

Again, you are complaining about the historical development of the largest and most advanced banking system in the world...Big banks upped the bar so small and large and all sorts of banks can provide better service and to deregulate their own industry.

Blah blah blah blah blah blah blah...So because banks have developed advanced methods of screwing their customers, I should just put some ice on it? I worked with bank marketing for large banks for years. It was the ultimate oxmoron. What do customers want from their banks? Lower fees, better service and more locations. What do large banks offer? The opposite. How do you sell it? Thrash around like a drowning sailor for six months, and then buy another bank to make up for the declining market share. Meanwhile, regionals such as Commerce Bank are buying up the locations that other banks closed because they were unprofitable and are keeping those locations open seven days a week and are growing like a weed.

You can blah blah me all you want. It doesn't work on me, I've been there, seen that, helped peddle the nonsense.

[WildTurkey]

guess I've finally found a technological advance that I'm 100% against. I'm really uncomfortable with shredding an original signature and keeping a digital facsimile.

Get a checkbook that makes automatic 'carbon' copies.

[blackdog]

I don't get my cancelled checks back. Whenever I've needed proof of payment, mostly with USDA Farm Sevice Agency, a carbon in my book and a receipt was good enough for them. I'd say that if I'm in a situation where I'm needing to prove payments to some originality on some frequent basis, I've got bigger problems goin on than my bank.

I can count on one hand the times I've needed a cancelled check to prove something. Oddly enough, the last time was to General Motors over getting reimbursed for paying for recall work. It turns out there are lots of people out there in the business of defrauding recompensation programs of major corporations on recalls, rebates, and high dollar refunds. In other words, the same people complaining about consumer abuse are the same ones causing it.

[Syncro]

This will be a boondoggle for a while.

More and more checks are seen as a debit instead of a check # when the automatic phone thing is used to find out which checks have been paid.

If you have 3 checks out for $100 you call and find a debit for $100, but don't know which of the three checks has cleared. So you have to call and talk to a person to find out if the IRS check cleared or the automatic loan payment cleared.

One place even 6 months ago were we buy supplies took my check, did some digital stuff with it and handed it back to me and I think the money was sucked out of the account already.

The problem that will occur the most IMO is the machines the companies will not properly access your account.

I tried to pay a bill at my Cell company office, and the electronic check thing they used said my check was no good so they wouldn't take it. And the account had about 5 grand in it.

I told my banker and she was quite mad at companies that do this with their good customers.

I got the name of the company the Cell provider uses and she complained to them.

At my bank you can get a no-bounce account where if you don't have enough funds they will pay all the checks, and it will be a loan to the account for which you pay interest.

Which does not amount to much as all you have to do is deposit some money and the loan is paid.

But no 25 or $39 fees.


It's a good system for businesses especially nowadays as small business are regulated and taxed almost into oblivion.

[grellis]

I always get cash from the supermarket!!! Meijers lets you write a check for $25 over your purchase (or you can just go to the service desk and write a check) and there are no ATM fees. Our bank sends us a new ATM card each year. Each year I cut it up as soon as we get it. We haven't used an ATM card since our fourth month of marriage, back in '91.

Consequently, we haven't bounced a check since the fourth month of our marriage, back in '91. Talk about a coincidence!!!

[R. Scott]

Mine has a $25 bounced check fee – and most stores have $35 – 50 fees.
Bounced checks are costly.

[Gabz]

We do nearly everything with either cash, debit card, or electronically. If we write 5 checks in a month that is a lot. And since we switched to that plan, we haven't bounced a check!!

So because we so rarely write checks this new rule doesn't impact us personally - my gripe is that banks aren't required to do the same for customers....like making funds immediately available.

[mvpel]

I don't know that that practice will be discontinued. The actual check is still the legal document. Financial institutions may be able to transmit facsimilies digitally, but the original instrument is usually still required to be kept (you can fax a signed document, but it's not legal in the way a signed original is).

According to the FRB's FAQ on Check 21, the "substitute check" is legally equivalent to the orginal, and the original may be destroyed.

[Tolerance Sucks Rocks]

There will be not only at least 1000 light aircraft, their pilots, mechanics, office personell, etc. put out of work and the aircraft put on the used market but probably 100,000 drivers and their cars that were the courier services that moved the checks from bank to airports across this country.

"Mr. Romney Wordsworth! You are obsolete!"

[intolerancewillNOTbetolerated]

"I like getting my canceled checks back but with this you dont so if you got a problem then good luck proving it "

My bank has recently started posting images of the checks online. You can look at both sides to see endorsement and bank stamps and print it out, if need be.

[intolerancewillNOTbetolerated]

"Bull no more float.... Until a law says they can't hold a check, banks will have float, trust me. Only reason they don't float longer than they do now is because its illegal."

AIUI, banks will still have THEIR float time, but the money will be debited faster. Be sure the banks will continue the practice of milking every penny from your money before paying it out...there will just be a period of time between when it is your money and when it becomes the payees money...while it is essentially the bank's money.

[Petronski]

Millions and millions of expensive lessons are about to be learned.