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 ...
I like getting my canceled checks back but with this you dont so if you got a problem then good luck proving it
Hey,I didnt sign that!!
Can you prove it?
You will receive a 'legal' representation of the cancelled check. If it were necessary to obtain a certified copy of the original check that would also be available as banks retain copies or the original for a period of time.
The actual check is still the legal document. Financial institutions may be able to transmit facsimilies digitally""
I argued that with both of the banks I do business with.
The first institution that handles your check DESTROYS your check. Hence, if you pay your electric bill, their bank, where the check is processed first, destroys the check, after putting it "electronically" into the system.
I challenged this: What about fraud or embezzlement? Courts will only accept ORIGINAL documents. Their answer? The courts will have to accept the digital copies, because this is a Federa; :aw. I said that handwriting experts were only trained to work on original signatures, and they couldn't tell the same information when working with a 'Copy". They didn't seem to care.
I asked about checks misapplied, like to your credit card, where there is a 30+ digit code on the reverse which you need to have accurately and completely in order to straighten out a payment misapplied. (happened to me-took 8 mos to correct). They were rather cavalier.
More or less told me to get with the electronic age. They more or less said that everyone will have to do their banking online. I asked about the great number of states that had the power failure last year, and they didn't seem to get it. I said it was impossible to believe that there was no loss of data when that happened so quickly. They wouldn't discuss that. I asked about the number of people in the country who do not even have electricity. They looked at me like I was crazy, but less than 25 miles from where we were sitting, there are a number of homes which are off the power grid, and live on generators. There are lots of people who have electricity, but could give a rip about having a computer. All the Dems and sKerry can cry about is about how many people have been added to the pverty rolls, and now all the poverty persons are supposed to have and know how to operate computers?
JEEEEEZZZZ Give me a break. I have been unsuccessful in finding out who carried this bill in the USA Congress.
If anyone knows, please post here.
I general, I think there are going to be big problems with this system. Hundreds of jobs in the banking industry will be gone. Placing all your eggs in the computer age basket is irresponsible.
like getting my canceled checks back but with this you dont so if you got a problem then good luck proving it
Where do you read that in the article? I have already spoken with my bank and, with the exception of the post time, its business as usual.""
Ypur bank is lying or doesn't know the correct details. I am already getting "electronic" copies in my bank statements..last month.
I'm trying to be objective about this......does this mean that those of us who pay for our purchases will no longer have to pay for those scumbags who write bad checks? Hallelujah! Bet the prices won't go down.
One thing people are forgetting is that it is ILLEGAL to write a check when the funds are not immediately available. If you write a check to the phone company today and drop it in the mail, but won't have the funds to pay that check until tomorrow, that is technically illegal.
Will banks make more money under the new law? That remains to be seen. What is known is that banks already lose hundreds of millions of dollars each year due to check fraud ($815 million last year). Therefore, even the rosy projection of an additional $170 million in NSF fees is still only a drop in the bucket.
Check 21 requires an image that meets certain standards to have the exact same validity as the original paper document.
What will happen is this. You go to the teller window and write a check. The check is scanned into the system on the spot. The check is then shredded on the spot.
The savings to the banking industry is spectacular. A large bank spending 20 million a year on check transport and processing can eliminate the cost and get a payback on a check 21 implementation in 3 to 6 months.
It's a matter of which revenue source is greater........The float period in which your bank has the funds from a check you deposited, but is on hold for five business days Vs. The fees they will make on bounced checks from retail customers. It's a double edged sword folks, those banks were making gobs of uses with your money during those five day hold periods on checks you deposited into your account. If this system applies to the consumer's check it must also apply to the deposit the consumer makes at the bank.
Go credit union today. It's the only way to screw the big banks even just a little.
You kind of implied that the copies are not legal documentation...which is not correct.
The copies are legally binding and are required to be accepted in place of the original(s).
Banks are not required to keep the originals either. They shred them up actually.
Somehow I think political contributions are exempt from the same legal standards...............
Paging Frank Abignale........Paging Frank Abignale......
Your understanding of the (previous) float is not right. Banks were not using 'your' money while it is in the float. Incorrect.
The bank has not recieved 'your money' until the other bank gives it to them. When you hand the check to the teller is not when you gave the bank 'your money'...
With Check 21 a cross country transaction (say from Florida to California) should not exceed 2-3 days tops--in a worst case scenario.
For that type of transaction you would be sitting for about 2 days, which is less than half of before.
Getting your canceled checks has no relevance to Check 21. As far as cancelled checks, it's "business as usual".
Nope.
Thats the whole point of Check 21.
If I deposit an out-of-state check, I'm not gonna get the money any faster from what I have seen.
I wouldn't go credit union here where I live. They've got a practice of not returning cancelled checks along with the account statement every month. They just send you the account statement, and that's it. The bank however is more thorough, they send me the bank statement and the cancelled checks to back up the record. Then again, I'm not having to deal with a bank on the other side of the country. The bank I deal with is locally owned and operated.
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