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Banks implement Check 21 starting Thursday
AP ^ | 10/28/4

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 ...


TOPICS: Business/Economy; Front Page News; News/Current Events
KEYWORDS: check; nomorefloat
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No more float.
1 posted on 10/28/2004 7:57:34 AM PDT by SmithL
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To: SmithL

The end to hundreds of small companies that fly canceled checks around the country in light twins. A blow to general aviation.


2 posted on 10/28/2004 7:59:57 AM PDT by pabianice
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To: SmithL

I have long ago trained myself to not even WRITE checks, let alone mail them, until I'm dead certain the funds are already in my account and considered "collected."


3 posted on 10/28/2004 8:00:12 AM PDT by FreeKeys (A TRAITOR for President? NEVER! Besides, nutcase Scary Kerry wants to give nuclear fuel to Iran!)
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To: SmithL

A day of mourning

As someone who has made a habit of float time..just gotta watch it from now on..esp since my bank charges 29 bucks for a bounced check


4 posted on 10/28/2004 8:00:46 AM PDT by skaterboy (Boobookitty)
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To: pabianice

The handwriting's been on the wall ever since 9/11.


5 posted on 10/28/2004 8:02:45 AM PDT by SmithL (Vietnam-era Vet: Still fighting Hillary's half-vast left-wing conspiracy)
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Comment #6 Removed by Moderator

To: skaterboy

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?


7 posted on 10/28/2004 8:03:23 AM PDT by skaterboy (Boobookitty)
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To: SmithL

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.


8 posted on 10/28/2004 8:03:35 AM PDT by HamiltonJay ("You cannot strengthen the weak by weakening the strong.")
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To: SmithL

All I want to know is whether banks will continue to put holds for three up to five business days on checks deposited while the banks use your money...with no interest to the depositer by the way!


9 posted on 10/28/2004 8:05:08 AM PDT by kellynla (U.S.M.C. 1/5 1st Mar Div. Nam 69&70 Semper Fi http://www.vietnamveteransagainstjohnkerry.com)
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To: SmithL
Float is fraud.
10 posted on 10/28/2004 8:06:11 AM PDT by Chemist_Geek ("Drill, R&D, and conserve" should be our watchwords! Energy independence for America!)
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To: skaterboy

When I was in college, we referred to them as "airplane" checks.


11 posted on 10/28/2004 8:06:18 AM PDT by Eric in the Ozarks
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To: SmithL
No more float.

For us. Banks, however, will still sit on out-of-state checks instead of clearing them faster.

And here's another racket they came up with. When they post transactions, instead of posting them in the order they happened, they re-sort them from largest to smallest - so if you, say, forgot to write down a $200 check and had three debit-card transactions for $20, the $200 would clear first and then the three smaller transactions would bounce, which generates more fees.

12 posted on 10/28/2004 8:06:43 AM PDT by dirtboy (Tagline temporarily out of commission due to excessive intake of gin-soaked raisins)
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To: pabianice

"The end to hundreds of small companies that fly canceled checks around the country in light twins. A blow to general aviation."

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. This will take considerable time (years) to totally take effect but it becomes very obvious why the bill was kept almost secret and the date that it became effictive put just before the election so that no one would connect the implication or feel the effects until after the election.

There are over 80 aircraft and all the other affected personell and equipment just at Burbank, CA airport alone.



13 posted on 10/28/2004 8:06:54 AM PDT by dalereed
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To: pabianice

I was thinking the same thing. Don't a lot of pilots get their career start flying those overnight check runs before moving up to a regional airline?

}:-)4


14 posted on 10/28/2004 8:07:41 AM PDT by Moose4 ("That was beautiful. Now never, ever, do it again.")
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To: kellynla
All I want to know is whether banks will continue to put holds for three up to five business days on checks deposited while the banks use your money...with no interest to the depositer by the way!

It seems so, and that is a real shame. The payor will "lose" her money virtually immediately, and the payee won't get her money for days.

15 posted on 10/28/2004 8:07:42 AM PDT by Chemist_Geek ("Drill, R&D, and conserve" should be our watchwords! Energy independence for America!)
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To: SmithL

And will the godless bankers pass any of the savings along to us? Heck no! And if you try to cash an out-of-town check, they'll still make you wait 10 days so that THEY can float. The Bastiges!!!


16 posted on 10/28/2004 8:08:53 AM PDT by January24th
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To: SmithL
Yeah and it will still take 1 to 2 business days for my checks to clear when they are deposited.

Of course you could just cash the checks and then deposit the cash...but still......29 bucks each time you float a check.......Banks are the thing to invest in now!!!!!!!

17 posted on 10/28/2004 8:11:42 AM PDT by Radioactive
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To: kellynla

It is my understanding that checks we write will clear immediately while checks we deposit will still have the 3-5 day waiting period. I don't get it. If the technology is available to clear checks immediately, why aren't deposited checks cleared in the same way. This is going to put the hurt on businesses that understand the principle that the 10th of the month makes the world go round.


18 posted on 10/28/2004 8:11:49 AM PDT by Quilla
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To: skaterboy
I 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.

19 posted on 10/28/2004 8:12:33 AM PDT by grellis (Synchronize watches!!!)
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To: SmithL
From this link: New Rules To Sink Practice Of Check Floating

"Consumer Reports says that means the float time many people count on will not exist anymore. It does not appear that deposits will clear any faster."

That's a load of bullsh!t.

20 posted on 10/28/2004 8:12:43 AM PDT by Constitution Day (I don't know where the sunbeams end and the starlights begin, it's all a mystery...)
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To: dirtboy
That happened to me last year (blush) I forgot to account for a check I wrote, and they paid the largest first, and then force paid the smaller ones. I called when I discovered this and questioned them about it, and their answer was that they pay the largest first, assuming that the customer would want his housepayment paid rather than a check to the grocery store.

I don't know that I agree with this -- I'd rather call one company and apologize than call three.

21 posted on 10/28/2004 8:14:00 AM PDT by Tuscaloosa Goldfinch (LORD HAVE MERCY ON US, DON'T LET JOHN KERRY WIN!!!)
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To: MercCPC
I don't know that that practice will be discontinued.

I believe the practice of having PHYSICAL RECORDS will continue. The issue is one based on PROVENANCE. Provenance is a complex legal requirement for the ORIGINS and verification of an AUDIT TRAIL.
Without going into great detail, there is a requirement for certain types of banking instruments to be physical in nature. A search of the Web for PROVENANCE gives a far better description than I ever could.
22 posted on 10/28/2004 8:14:39 AM PDT by pyx (Being upbeat and positive is good.Overconfidence can still lose this election. RULE#1 The LEFT LIES.)
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To: SmithL

23 posted on 10/28/2004 8:14:42 AM PDT by evets (God bless president George W. Bush)
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To: Constitution Day

All of this Double Standard stuff that the banks do BEGS a MASSIVE Class action lawsuit!


24 posted on 10/28/2004 8:15:53 AM PDT by zzen01
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To: Tuscaloosa Goldfinch
I called when I discovered this and questioned them about it, and their answer was that they pay the largest first, assuming that the customer would want his housepayment paid rather than a check to the grocery store.

That's a load of bull, some wiseguy with an MBA figured that one out. I've worked with banks for too long to give them the benefit of a doubt, that they are doing this for any other reason than to get more fees from the situation, given that they in most cases know the chronological order of the transactions and have already adjusted the available balance prior to posting.

25 posted on 10/28/2004 8:18:12 AM PDT by dirtboy (Tagline temporarily out of commission due to excessive intake of gin-soaked raisins)
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To: grellis

There was quite a bit of discussion on another thread about whether electronic images of your checks will really hold up as proof of payment as compared to the actual check. I guess we'll have to wait and see.


26 posted on 10/28/2004 8:18:15 AM PDT by Wolfie
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To: grellis

I think they keep em and you get an electronic print out but they keep the actual check..maybe im wrong or maybe each bank is doing it their own way but mine just gives you a photostat of all of your checks


27 posted on 10/28/2004 8:20:27 AM PDT by skaterboy (Boobookitty)
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To: dalereed

Obviously, what we need then is a big federally funded program to have the folks who used to fly checks around fly pieces of white paper back and forth.....


28 posted on 10/28/2004 8:21:28 AM PDT by Strategerist
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To: skaterboy

I was watching some financial show the other day and one of the panelists made the point that banks are "positively drooling" (her words) over this legislation because they stand to collect tens of millions of dollars in new overdraft charges.


29 posted on 10/28/2004 8:22:09 AM PDT by Skooz (Any nation that would elect John Kerry as it's president has forfeited it's right to exist.)
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To: kellynla

YUP! The banks will still "hold" deposits for two to three days, but "clear" checks written immediately! Can you say double standard?


30 posted on 10/28/2004 8:22:20 AM PDT by Polyxene (For where God built a church, there the Devil would also build a chapel - Martin Luther)
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To: dirtboy

I think you're right.


31 posted on 10/28/2004 8:24:12 AM PDT by Tuscaloosa Goldfinch (LORD HAVE MERCY ON US, DON'T LET JOHN KERRY WIN!!!)
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To: pabianice; blackdog

About the only way for a pilot to make money and build hours these days is by flying drugs /sarc.


32 posted on 10/28/2004 8:24:14 AM PDT by snopercod (Inflation, it's how wars are paid for.)
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To: MercCPC

Now I don't know if she were speaking authoritatively or not, but I was talking with a customer service manager at our local Wally World and she told me that when the system is implemented and the cashier runs a check through the register, the register will read the routing information, connect to the bank, and debit the account - sort of a cheap debit card. If the money ain't there, the register will spit it out.


33 posted on 10/28/2004 8:24:43 AM PDT by hardhead (Liberty Watch - http://mailman.xmission.com/cgi-bin/mailman/listinfo/liberty-watch)
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To: SmithL

Morning news shows are stating that banks expect to make $170 MILLION a MONTH in overdrawn charges starting today.


34 posted on 10/28/2004 8:25:16 AM PDT by ridesthemiles (ridesthemiles)
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To: Wolfie

Under Check 21, the electronic image that is created is referred to as a "substitute check" and carrys the legal weight of the original. As such, there really is no question of whether or not they will hold up as proof of payment. They will.


35 posted on 10/28/2004 8:25:52 AM PDT by Hurricane Andrew (History teaches that wars begin when governments believe the price of aggression is cheap.)
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To: Polyxene

"Can you say double standard?" and I can also say "scam"...


36 posted on 10/28/2004 8:27:49 AM PDT by kellynla (U.S.M.C. 1/5 1st Mar Div. Nam 69&70 Semper Fi http://www.vietnamveteransagainstjohnkerry.com)
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To: skaterboy
I like getting my canceled checks back but with this you dont so if you got a problem then good luck proving it

Yep, I've got every one I ever wrote to my ex for child support, and if I have my way, I'll be buried with them, too! With the so-called "Check 21", I'm just glad that my support obligation ended over three years ago.

Now, when will those nimwits figure out how to credit deposits instantly???

37 posted on 10/28/2004 8:28:10 AM PDT by hunter112 (Take this John and shove it!)
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To: skaterboy; Wolfie
Like I typed, I have already asked my bank (BankOne, recently acquired by Chase) about this. Its business as usual with the exception of the post time. If I'm not mistaken, all banks allow you to choose if you want your checks back or if you want photostats instead, with the bank warehousing the checks for you. My bank charges for the return of cleared checks so I get the photostats--its easier for bookkeeping, anyway. Our checks come with duplicates so I always have some kind of a record on hand.

My advice: Write down any questions you have, call your bank's toll free customer line, get the facts straight. Be sure to get the name of the telephone representative, don't hesitate to ask them to slow down in their explanations if you are jotting stuff down. Break yourself of the habit of floating checks immediately. What are you, the government??!

FReegards!

38 posted on 10/28/2004 8:31:24 AM PDT by grellis (Synchronize watches!!!)
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Comment #39 Removed by Moderator

To: pabianice

US Check, an actual division of the Federal Reserve had it's own Learjet airline which serviced every federal reserve city after picking up the checks from the smaller guys. They had at least sixty Lears when I delt with them in the 90's. Imagine the operating budget for a fleet of learjets that size. I was once told that the float money captured was $20,000,000,000 per week by one of the lear pilots. Using that much money for free for a week is a real hoot.


40 posted on 10/28/2004 8:34:12 AM PDT by blackdog (Can we possibly have just one more "Kidz-Bop"?)
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To: skaterboy

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.


41 posted on 10/28/2004 8:35:00 AM PDT by JoeV1 (The Democrats-The unlawful and corrupt leading the uneducated and blind)
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To: MercCPC

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.


42 posted on 10/28/2004 8:35:44 AM PDT by ridesthemiles (ridesthemiles)
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To: grellis

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.


43 posted on 10/28/2004 8:37:21 AM PDT by ridesthemiles (ridesthemiles)
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To: MercCPC

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.


44 posted on 10/28/2004 8:43:10 AM PDT by hardhead (Liberty Watch - http://mailman.xmission.com/cgi-bin/mailman/listinfo/liberty-watch)
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To: ridesthemiles

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.


45 posted on 10/28/2004 8:44:21 AM PDT by Hurricane Andrew (History teaches that wars begin when governments believe the price of aggression is cheap.)
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To: ridesthemiles
I have been getting electronic (photostatic) copies of my checks for well over a year. BankOne has been warehousing my cleared checks in that time and they will continue to do so. They aren't lying to me and they aren't mistaken. Like I said, call your own bank and see what they say.
46 posted on 10/28/2004 8:44:39 AM PDT by grellis (Synchronize watches!!!)
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Comment #47 Removed by Moderator

To: MercCPC

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.


48 posted on 10/28/2004 8:46:56 AM PDT by Pylot
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To: Hurricane Andrew

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.


49 posted on 10/28/2004 8:50:26 AM PDT by blackdog (Can we possibly have just one more "Kidz-Bop"?)
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Comment #50 Removed by Moderator


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