Changes in the Banking System

[Slayer 0]

Its' here:

 

As of 28 October it will no longer be possible to float a check. A new law

goes into effect on 28 Oct and all checks will be cleared electronically

within minutes...even at night, even on weekends. If payday is Monday and

you write a check on Saturday assuming it won't clear before your paycheck

is in you will be wrong-that check will bounce. And you will be charged

overdraft fees. Be aware of what you are doing and the affect it could have

on your credit rating or career. Make sure funds are available before you

write a check.

 

http://www.consumersunion.org/finance/ckclear1002.htm

 

http://www.federalreserve.gov/paymentsyste...ion/default.htm

 

 

"Check 21" starting in late October

You've probably bought something in a store with a check even though you

don't have the money in your account at the time. You figure you have a few

days for the check to clear, and by then the money will be there. It's

called the "float." Well, the float is slowly becoming a thing of the past.

Because of a new law going into effect in October, money will be drafted

from your account immediately when you write a check. It's called "Check

21," and it allows retailers to scan your check through a machine that

deducts the cash within minutes. It's essentially the end of the paper

check system, as well, because the check will eventually be destroyed. There

will be an image of the check online and that will serve as proof if you

need it. But everything is becoming electronic, and a bank will know if a

check is good right away. So, be prepared to move to an electronic bill pay

system. It's the smart way to go. What about checks that you deposit? Well,

the float is no longer available to you, the customer. But the bank still

will hold a deposit for a few days to make sure it

clears. It's not fair, but it's the way it's happening.

 

What are the main effects of "Check 21" on consumers?

 

* You won't be able to get your original paper checks back, because your

bank will no longer have them.

 

* Checks you write will clear sooner, increasing the risk that a check will

bounce if funds are not in the account when you write the check. Don't

write a check unless the funds are already in the account to cover it.

 

* " You may not get access to the funds from checks you deposit any sooner,

because the new law does not shorten check hold times. After 30 >months,

there must be a study on whether banks are making funds available to

consumers earlier than the allowable hold periods.

 

* Banks will save money on processing checks, but banks are not required to

share these savings with consumers.

 

* Different kinds of copies of a check will have different rights attached.

Check 21 creates a new kind of paper copy of an electronic image of a check.

This special kind of copy is called a "substitute check." Only a substitute

check can be the legal equivalent of the original check, and only a

substitute check triggers your right to recredit of disputed funds. A

regular copy of a check does not carry these same protections. If you ask

for a copy of a check, your bank may send you an ordinary copy instead of

this special kind of copy which triggers legal rights and protections unless

you ask for a substitute check.

 

* "A bank other than your bank will have your original check, and will

decide whether to destroy it. Neither Check 21 nor other law requires a bank

to keep your original check for any period of time. Before Check 21, your

own bank decided how long to keep your original checks, if you didn't get

them returned with your statement. Under Check 21, the bank of the person

you wrote the check to may decide when to destroy your check.

 

* Consumers will get new rights for some electronically processed checks,

but not for others. When a so-called "substitute check" is provided to a

consumer, Check 21 gives the consumer a right to have funds of up to $2,500

recredited to the consumer's account in 10 business days if the check is

paid twice, paid for the wrong amount, or otherwise paid in error. The

statute is ambiguous about whether this new right applies when a paper

substitute check is used in the processing of the check but is not returned

to the consumer. The regulations restrict the right of recredit only to

checks where the consumer was provided with a substitute check. If a check

is processed electronically by all the banks it is routed through without

the use of a substitute check and the consumer is not provided with a

substitute check, then the check remains under state check law. In that

case, the consumer does not receive a 10 day right of recredit even if the

electronic image of the check is paid twice, paid for the wrong amount, or

if both the electronic image and the paper check are paid.

 

* Consumers who want to maximize their consumer rights should ask for return

of "substitute checks" with their checking account statements. Watch out for

fees associated with a substitute check-returning account. Look for another

bank if your bank charges a high fee to get copies of all your checks as

substitute checks.

 

* Only the special "substitute check" can be legally equivalent to the

original check to prove payment. The copies that a bank sends to consumers

under a so-called "voluntary truncation" agreement, where the consumer

agrees not to get the checks back, do not prove that a payment has been

made, and do not trigger your Check 21 recredit right.

 

Damn, I relied a great deal on the floating check system to cut checks a day or two before payday

 

I also love the "if you write a check to business, it's paid right away, but if a business writes a check to you, we can drag our feet on it"

[kkktookmybabyaway 0]

I never have a problem with this, so I just laugh at all the poor folk who'll be hit with hundreds of dollars of fees...

[LatinAssasin 0]

Aw crap.

 

I need to get a debit card now.

[MrRant 0]

Well the only checks I write are for rent.

[MarvinisaLunatic 0]

The only checks I send are for my loan payments, and it takes almost a week for them to get the checks by mail, so I have a bit of leeway in the transit time. They wont accept any sort of electronic payments either, which made me mad at the time.

 

My bank has free online banking, and they sent me a letter saying that it would cost $7 a month for them to return checks to me, regardless of whether they send checks back or not (I dont write a lot of checks because I have a check card, so some times I wouldnt get any checks back), so I decided to opt for the free online check image service, in which I can view any check for 6 months.

 

And as far as my paycheck, I get direct diposit so it doesn't really matter.