Banks Canceling Canceled Checks

Consumer Advocates Balk at Federally Mandated High-tech System

September 21, 2004
WND

While critics of a new federally mandated check-processing system for banks set to go into effect next month are highlighting what they see as serious downsides for the millions of Americans who write checks every day, the companies who are helping financial institutions comply with the plan are confident it will benefit both banks and consumers.

Last year, Congress passed the Check Clearing for the 21st Century Act, which was driven by the Federal Reserve. Supporters note the plan passed both houses of Congress unanimously. It goes into effect on Oct. 28 and represents the first major change in check processing since 1957.

Though the plan was first conceived in 1999, the legislation gained momentum when the 9-11 terrorist attacks grounded planes for several days, causing delays in getting checks back to their banks of origin.

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Canada has had a similar system for quite some time. While Canadians still can obtain a preimum chequing account which will return their cancelled cheques to them, all corporate accounts have their cheques returned. But that is just the aside to your change. issued cheques will clear your account much faster now as they are processed electronically. For some that is not good news, but on the bright side, funds from cheques deposited into your account barring collection requirements, should also be available sooner.

I like the system here in Canada, and it has been 11 years since I last had to review a physical cheque.