I usually try not to go all "banker" on my blog, but I know most bank customers don't read the disclosures in their statements (I never even open my statements), so I thought I give a little Public Service Announcement: don't write any checks if you don't have enough money in your account to cover them. The days where you can a write a check a few days before payday are coming to a swift end.
Check 21, a new system for clearing checks goes into effect today. Basically, it works like this: in the past, the actual physical checks had to be sent from bank to bank in order to be collected. With Check 21, electronic images are a valid replacement for the physical checks. So checks can now clear as fast as debit card transactions. All banks are participating in this - it's mandatory, not optional. It might not be as quick as it could be at first, but I expect that within a year, checks will clear within one day or even a few hours - local or not. This has been your warning from your friendly blogging banker.
You may now resume your regular activity.
Thanks, for the warning.
Posted by: jcklsgk at October 28, 2004 02:37 PMActually, the obverse of such a transaction will be quite beneficial. If it works the same way, that is. Will funds from deposited checks become available that much quicker too?
There's nothing I hate more than banks "holding" deposited funds for days and days and days.
Posted by: Suzanne at October 28, 2004 02:49 PMNo, see that's what I don't get. Funds availability has been a MUCH more known complaint of bank customers, but this law won't make deposits go through any more quickly. Thanks for posting about it. It's not being well publicized and it's going to shock a bunch of people! The only float left will be the day or two a check you mail takes to get to wherever you're sending it.
Posted by: brad at October 29, 2004 05:54 AMI thing Reg CC (funds availability regulation) will change eventually - hopefully soon. Maybe once they get all the kinks worked out of Check 21, they'll change that policy.
Posted by: Christin at October 29, 2004 09:35 AMWe'll all just have to become "plan-ahead" people. Easier said than done, but true nonetheless.
Posted by: Aman at October 29, 2004 01:50 PMOne more reason why a line of overdraft protection credit can be a marvelous thing...
Posted by: Valerie (Kyriosity) at October 29, 2004 07:06 PMCheck 21! We hates it!
Posted by: Hugo Fitch at October 30, 2004 11:17 AMWhy is it so hard for people to understand the simple fact of if you don't have the money, don't spend it?
Posted by: SonofThunder at November 2, 2004 07:55 AMReg CC may and should change for the better as a result of Check21, but the concept will remain valuable. "Holds" on deposits can protect customers from unknowingly spending money based on a bad check. Holds are usually only placed on deposits when due suspicion is present. Check21 doesn't solve the problem of bad checks, it only improves the situation.
Posted by: Mike Terrell at November 4, 2004 12:17 PMI am not entirely fond of this because those cancelled checks have come in handy as proof of payment on more than one occasion. To include to the IRS, that insisted we owed them money I paid.
Now, as I understand it, there will be a fee to get a copy of this image of the check? Not very customer friendly.