Posted on 10/28/2004 7:57:34 AM PDT by SmithL
NEW YORK (AP) --
New federal regulations designed to speed up the processing of checks went into effect on Thursday, and consumer advocates advised Americans to be more vigilant about monitoring their accounts.
The Check Clearing for the 21st Century Act -- better known as Check 21 -- will allow financial institutions to exchange electronic images of consumers' checks rather than transporting the actual paper checks around by air, land and sea.
As a result, checks that consumers write are likely to clear faster than before, so there will be less "float" between the time a check is written and when funds are debited from the account.
And consumers who still get their checks back with their statements -- about 36 percent of bank customers -- are likely to begin seeing images of some checks among the paper ones.
The changes won't happen overnight.
Forrester Research of Cambridge, Mass., estimates that it will take until the end of the decade for banks and credit unions to digitally process checks from start to finish. It said that some major banks won't have fully implemented image exchange processes until about 2008.
Still, consumer advocates warn that if check writers aren't careful, they could easily overdraw their accounts and end up paying late fees and other penalties.
(Excerpt) Read more at sfgate.com ...
Yup... Even though the bank may get the actual cash value of a check instantly, they can still hold your deposits for as long as they want. My guess is that they won't do it though... There are simply too many banks that might look at not holding the deposited checks as a "feature" to attract new customers.
On the other hand, it's possible that they may wind up with a mixed system for quite some time... Holding some checks that don't clear electronicly, but allowing access to the funds immediately to those that do clear electronicly.
Mark
There are places that have been doing that for some time now... There are 5 different stores I've been to that when I write a check, they run it through a machine sort of like a credit card machine, and it endorses the check, and they hand me back my check and the receipt!
This cause me some very serious problems using Quicken to balance my check book!
I use an automatic download to reconcile my checking account from my bank, and I was a bit lax about watching my statements for about 3 months... I finally noticed that my statements said that I had about $400 more in my account than I thought I did! Well, I tried backtracking my account, and found that I had a number of checks that were entered into my Quicken register twice! Once by me, and once using the electronic vendor code, rather than the payee! Basicly, in my version of Quicken, if they don't match exactly (and they never do), Quicken assumes that they're different transactions! It also occasionally happens with my automatic payroll deposits, but I learned a long time ago to keep an eye on those! The only way to fix this (at least in my version of Quicken: 2003) is to manually match up the electronic transactions.
Mark
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