Dear Five Doves,Could we be any closer to the "mark"?!!!!!!
I got this from an email.
09/16/2004 10:08 AM
Subject: FW: Hot! No More Floating Checks
Interesting......I knew this was happening at my bank, but didn't know it
was a new law.
"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 availa!
ble 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.
When do these changes go into effect?
Check 21 becomes effective October 28, 2004.