New bank check procedure

[Guest kitkat]

Got this in an intra-office e-mail:

"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.

From Consumers Union:

Summary:

Check 21 is sweeping new federal law that takes away your ability to get back your original paper checks. Under this law, consumers will be more likely to bounce checks and may find themselves paying higher bank fees. The complicated new law gives you some rights, but those rights depend on a variety of factors, including how the merchant and the bank decide to process your check.

Tips from Consumers Union:

ASK FOR A RECREDIT IN WRITING: If something goes wrong with your checking account, make a written request that your bank "recredit" (return) the funds to your account. You have a right to recredit in some cases, and not in others. Because it is hard to tell when the right of recredit applies, you should ask, in writing, for a recredit whenever a check is paid twice, a check is paid for the wrong amount, or something else goes wrong with your checking account.

ASK FOR A SUBSTITUTE CHECK: You get a limited recredit right under Check 21, but the regulations restrict recredit to consumers who were provided with a substitute check. Always ask for a substitute check, which is a special kind of copy of your paper check. If you now get your original checks back, ask for an account that returns substitute checks every month. If your bank charges too much for an account that returns substitute checks every month, look for another bank.

EXPECT THE CHECKS YOU WRITE TO CLEAR FASTER: Don't write a check unless the funds are already in your account. The checks you write will clear faster, but banks aren't required to speed up the time when they make funds available from the checks that you deposit.

DON'T SIGN UP NOW FOR VOLUNTARY CHECK TRUNCATION: You have even fewer consumer rights under voluntary non-return of your checks than you'll have under Check 21. Decline invitations from your bank to convert to voluntary check truncation.

Some details are here:

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

Kat

[truseek]

Implementing the infrastructure for a cashless society....

[Ovedya]

I actually heard about this the other day. It seems to me that the whole point of writing a check is to have that "float" anyway. Banks are going to lose out on a TON of fees with this. Checks will be obsolete in a matter of months. Once consumers realize that they can't float a check they're going to stop writing them. There is no reasonable reason to write checks at all, except to make payments through the mail. More and more people are paying their bills online now anyway.

[LOVE SONGS]

Thanks .....KITKAT

When i write a check at a store, they run it through a machine to see if it is good.

But , i noticed on my statement that the check... had went into my account

2 days after i went to the store.

So, now the checks will be as a Bank Card....

With the Bank Card the money is taken out right away upon purchase.

Well, all i can say is .... i still need checks to mail out of town bills.

They probably will do away with the checks.

Then when i have to pay a car note out of state, the Finance company will

charge us fees for them to take the money out of the Bank over the phone.

The Finance Company offers us to pay over the phone now but, their is a fee

that they charge.

So, that is why i mail out the bill...Who wants to pay extra????

LOVE and PEACE to everyone, :hug:

[other one]

We do online banking and write electronic checks and have for several years (since CheckFree was started).

We average three to four written checks a month. Most of our purchases are using my wife's visa card that gives us a one percent cash back....

We get legal copies of our checks with our bank statement and that's as good as a canceled check. We've not had any trouble in the many years our bank has done this.

Floating checks is illegal and has been for as long as I can remember (which is getting less each year ) and we have not done that since the kids were born 30 years ago.

It should not be a problem with anyone as I can see.... unless you've been floating checks. In that case shame shame shame......

[Can Do (Phil 4:13)]

Here in Australia there is no such thing as the Cheque system that has been operating in the US. Here we have EFTPOS - Electronic Funds Transfer P? Operating System. The money in your account is transfered immediatley to the business that you are transacting with. All this is done with a card issued from the bank with a magnetic strip on the reverse. Your details are on the strip and you can use the card to withdraw cash from ATM's -Automatic Teller Machines.

I find it odd that you guys still have cheques! Cheques are in very limited use here within Australia.

That's just a FYI.

Faithie :hug:

[Ovedya]

We do online banking and write electronic checks and have for several years (since CheckFree was started).

We average three to four written checks a month. Most of our purchases are using my wife's visa card that gives us a one percent cash back....

We get legal copies of our checks with our bank statement and that's as good as a canceled check. We've not had any trouble in the many years our bank has done this.

Floating checks is illegal and has been for as long as I can remember (which is getting less each year ) and we have not done that since the kids were born 30 years ago.

It should not be a problem with anyone as I can see.... unless you've been floating checks. In that case shame shame shame......

Hey, sometimes you gotta do what you gotta do...

The only time that I ave ever floated a check is the day before payday, and I know that the money will bein there in a matter of hours.

[other one]

when we first got married we would have to split a hamburger on friday nights because we didn't have the money to buy two.

I'll never forget those days. I learned rather quickly that if a check bounced this week next week we didn't even get the half hamburger

I am very fortunate to have a wive that is very fruggle. She keeps me on the ball financially

[Steff]

Simple solution:

Have a small buffer in your checking account at all times or most banks offer a overdraft protection that pulls from savings should checking go over. There is usually a fee involved if that happens but it's cheaper than bad check fees.

[hmh]

I use checks only for bills or large expense items, such as car repairs. I use cold, hard cash for everything else. I just wonder how long it will be before that is no longer used. :sam: :prayer