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Check 21 - No more check floating

Discussion in 'The OT' started by Mark Holtz, Oct 15, 2004.

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  1. Mark Holtz

    Mark Holtz Day Sleeper DBSTalk Club

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    On October 28th, Check 21 will start to be implemented by the banks. This will have the checks be turned into images and processed electronically and thus reducing the time it takes for a check to clear.

    Beware check floaters: The check may clear within 24 hours.
     
  2. BuckeyeChris

    BuckeyeChris Icon/Supporter

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    • The Check Clearing for the 21st Century Act (Check 21) was signed into law on October 28, 2003, and will become effective on October 28, 2004.

    • Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation.

    • The law facilitates check truncation by creating a new negotiable instrument called a substitute check, which would permit banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks.

    • A substitute check would be the legal equivalent of the original check and would include all the information contained on the original check.

    • The law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the act to create substitute checks.
    I work for a company that is the leader of processing online financial transactions, and we have been preparing for Check 21. As Mark warned, the biggest impact to consumers will be no more float, which could cause an "early" debit for some not used to it. Also, you may not get your original check back when it clears; you may get a legal copy of the check.

    Now, if only the banks could deposit our checks as fast! :rolleyes:

    For those who want to know more, check out this link:http://www.aba.com/About+ABA/CheckTruncationAct.htm
     
  3. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    Banks in the ATL fed reserve (SE) area have been doing this for several years now. Since the last century, I've been getting my checks back in f/b images, with statement pages hole-punched for a 3-ring binder.

    Welcome to the 21st century. :grin:
     
  4. BuckeyeChris

    BuckeyeChris Icon/Supporter

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    Receiving electronic images of your checks is not new, you're right. However, banks sending electronic images of your checks to other banks is new. This process will speed up the check clearing process dramatically. Also, the electronic image of your returned check may look completely different than your original check, i.e., it won't be a facsimile copy.
     
  5. RichW

    RichW Hall Of Fame/Supporter DBSTalk Gold Club

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    CitiBank has been doing this with my check payments for about six months.
     
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