FYI - Checks Will Clear Much Faster

[news]

Clearing faster
New regulations eliminate ‘float' time people enjoy when writing checks


Friday, October 29, 2004 - NEW federal regulations that went into effect this week will significantly speed up the time between when you write a check and when the amount is deducted from your account.

Officials with Southland banks say they are prepared to handle the changeover but warn that the so-called "float' time people enjoy when writing checks will disappear.

"People are not going to have the float (time),' said D. Linn Wiley, president of Ontario- based Citizens Business Bank. "Instead of taking three to four days to clear, it will take less than one day to clear.'

Passed by Congress last year, the Check Clearing for the 21st Century Act, or Check 21 Act, is expected to eliminate a large amount of paper associated with clearing checks.

Normally, when a check is written to a retailer, for instance, it is sent to the bank where the check was drawn. That "float' time has allowed Americans to write a check a few days before they actually have the money in their account to cover the amount on the check.

Now, banks can use a copy or photocopy of your check and submit it electronically across the United States, eliminating a lot of transportation and paper costs.

These electronic "substitute checks' can be requested from your bank after payment and are considered legal proof of payment.

This change in check processing was not begun by the banking industry but instead initiated by the Federal Reserve System after the Sept. 11, 2001, terrorist attacks. After the attacks, flights were grounded and many checks went undelivered for days.

Many banks already have the technology in place to handle this change, such as Citizens Business Bank. Customers will be able to receive copies of their electronic canceled checks on a compact disc, Wiley said.

Banks such as Citizens and PFF Bank & Trust have alerted their customers about the changeover by including pamphlets in monthly statements to their customers.

PFF has only received a few calls from people curious about the change, said David Sweet, vice president and director of marketing for the Pomona-based bank.

The main change for banking customers will be checks are being turned into copies and photocopies, he said.

"Customers aren't probably going to see a whole lot of difference,' Sweet said.

People interviewed at Ontario Mills on Wednesday said they were unaware of the changes in check processing but said they don't expect it will affect them greatly.

"I usually only write a check if I have enough money in my account to cover it,' said Steve Olson of Redlands.

Besides, Olson said he relies mainly on his ATM/debit card.

"Ninety-five percent of the time, I just use my debit card,' Olson said.

Like Olson, Angel Trujillo of Los Angeles said he uses his debit card most of the time.

Eliminating the "float' time for checks will not be a problem for him, he said.

"I think it's important for other people,' he said.


-- Joe Florkowski can be reached at [phone].

[Banks SUCK]

I just want to know how come in this day in age, when you write I check it can clear instantly BUT when you deposit a check (and not some personal check written to you by John Doe but a real check from a national bank for instant Fidelaty) it takes the bank 14 business days to clear?

[McLite]

Do you have any negative account history? (such as bounced checks, etc.)

Holding of a check isn't typical. With my bank, a check deposited is credited immediately. The only exception is when the amount of a check is much higher than usual - for examply, say around $7000. In that case, they would credit me $3000 of it immediately and then hold the other $3000 until the check clears - but for only a few business days, not 2 weeks.

This more efficient check clearing system should speed up that process, as well.

If you have an unblemished history with your account, I'd talk to the bank about that ridiculously long hold time.

[Jen]

I have never bounced a check. At my bank, any deposit over $3k is put on hold for a few days, not 14. They usually put it as endorsement error, which I have confirmed with them is not true. They told me that when I transfer funds from one account to another, from a different bank, they need to make sure that the funds are there because I guess there is a history of people writing large checks like that without funds in the account. They just use the error message as an excuse to hold the funds. I find it frustrating. They should be able to see that I have been transfering money from one business account to a personal account for years and the money has always been there.

[Jen]

PS: The reason why the banks do not speed up the process of making the funds available is because it is not in their best interest. The federal government pays them a small percentage on every dollar that they have in interest, I think on a daily basis. The longer they can hold onto the funds, the more money they can make on these funds. Every day that they can stop you from using the funds is another day of interest for them.

Speeding up the time that banks can get money from checks makes them more money as well. It all works in their favor.

But then again, that is just how our society works. Corporations and people in power manipulate the system to work in their favor. Marketing campaigns are effectively designed to get consumers to focus on other things so that we wont even notice what is actually going on most of the time. What consumers need to be doing is, but often do not have the time or desire to do, is to question everything. However, it is much easier to just accept it and let these other entities control things. Which explains why things are the way they are.

[Banks SUCK]

What you say Jen makes since. The check was over 15K so I guess the bigger the check the longer the hold. Also another sucky thing about our bank is we found out this year when you get money transfer to your account that is over a certain amount they charge you. I understand if you are transferring the money, but you should have to pay twice... once for the money being transfer then for having the money wired into your account.

[bank fees]

Christmas wish list for Santa Banker

CHRISTMAS is when we send an annual wish-list to our friendly Santa Banker, telling him - with no holds barred - what we'd like to see parked under our tree this Yuletide.

If the list were complete, it would curl around Santa's workshop several times. But there are certain key gifts, long overdue, which would make people more jolly and heighten their spirit when they bank. Here's this season's letter. . .

Dear St. Nick (as in fees and charges):

You're missing out on a giant opportunity to spread joy among your customers and build good will. Here's how.

n Instead of just taking our money, why don't you help us manage and protect it? For example, rather than feeding us those self-serving, hardly-ever- read brochures in your literature rack, how about some real helpful stuff on strengthening our credit record, raising our FICO score, avoiding fees, and what to do if some thief steals our identity? Or don't you care?

n Why don't you explain - in simple English - the latest rate trends for mortgages, buying a car or getting a personal loan? Mortgage rates have dropped by more than a couple of percentage points in the past few years, but we'd never know it judging from your ads, talking to your people or reading your lobby signs. Isn't there some high-priced economist character at your headquarters who could write about this for the Average Joe and Average Jane?

n Explain how in blazes you can get away with paying 1 percent to 2 percent on our savings account while you clip us with 18 percent or 19 percent interest on a credit card, or $30 for a bounced check plus another $5 penalty against the innocent guy to whom the check was written. Especially when it only costs your bank maybe a buck and change to process that very same check.

n How come you have two different policies for the way you treat people at your outfit? Mrs. Gottrocks swaggers in with her six-figure account balance and you instantly waive her $25 late charge as though you were swatting a fly. Joe Blow, on the other hand, who can hardly manage to care for his wife and six kids, gets nailed with the charge even though he can't afford it.

n Ask more of your tellers to explain how the new Check 21 law works, where you no longer have to return original copies of canceled checks with our statement, because now you can process checks electronically. (Failing to do so only increases the chance of bouncing a check and getting hit with a fat fee.)

n Shame on you for launching the "universal default' system, where, even if we've never had a problem with your bank, you now clip us with a 28.45 percent credit-card rate if we've had a late payment with our car company, telephone bill or rent.

n How about reserving a special teller window for deposits only? That way, we wouldn't have to cool our heels in line for a half-hour while some bozo is arguing about his last statement with one of your employees.

n As for those money market account ads screaming a "3.5- percent yield,' it's time you enlarged those flyspeck-size qualifiers at the bottom of the ad - the ones that reveal we must deposit $50,000 or $100,000 to earn that much. Otherwise, the yield can often fall below 1 percent if our balance is under 10 grand.

n On multiyear CDs such as 2 1/2 years, help us compare the best deals by showing the actual return in dollars and cents, not percent. On, say, two accounts both with a 2.5-percent APY - one compounded daily and the other compounded annually - it's impossible for the average person to figure out in his or her head which CD is the better buy.

n Now that you've parked a securities salesman at a corner desk, touting mutual funds, how about another desk designed expressly to help families needing debt consolidation and other borrowing help, such as college financing, senior care or a cheaper credit card?

n When was the last time you taught the value of money to kids within the school system, or put out a simple brochure or lobby poster describing how we can help needy people in the community?

Merry Christmas to all!

www.sgvtribune.com/Stories/0,1413,205~23290~2587302,00.html