A New Era In Banking Begins

November 25, 2004 06:08 AM

A New Era In Banking Begins

Excerpt: A new era in banking has begun as the Check Clearing for the 21st Century Act, commonly known as Check 21, takes effect. Banks will slowly get away from the business of flying checks around the country each night. Instead, checks will be cleared electronically, and often destroyed when they are cashed.

Every night, millions of cashed checks fly around the country, headed for their home bank. Starting Thursday, technology will begin grounding many of those flights. And it may ground some consumers, too — those who try to sneak an extra day or two of "float" out of their checking accounts.

A new era in banking has begun as the Check Clearing for the 21st Century Act, commonly known as Check 21, takes effect. Banks will slowly get away from the business of flying checks around the country each night. Instead, checks will be cleared electronically, and often destroyed when they are cashed.

"We are bringing the industry out of the Pony Express era," said John Hall, spokesman for the American Bankers Association.

But the new law might have some surprising — and unwelcome — side effects for checking account customers. Consumers trying to stretch their money have become accustomed to taking advantage of "the float" — the time it takes after they write a check for banks to deduct from their accounts. It's a bit of a secret loan, but Check 21 means it's about to be shut down for good.

READ FULL STORY ...

What's Your Bill-Paying Personality? (November 28, 2004)

When it comes to paying bills, Americans fall into one of six personality types, reports Lieberman Research Group. Which are you? E-Savvy Planner: You are most excited by new technology products and services for financial management. When it comes to money management, you're more willing ...

Debit Cards Lack Protections Of Credit Cards (November 28, 2004)

When you're making a big purchase, think twice about using a debit card in place of a credit card. If something goes wrong, you may have a tough time getting your money back with a debit card, if you get the money back at all ...

Automatic Debit Scams (November 22, 2004)

Fraudulent telemarketers have found yet another way to steal your money, this time from your checking account. Consumers across the country are complaining about unauthorized debits (withdrawals) from their checking accounts. Automatic debiting of your checking account can be a legitimate payment method; many people ...

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The Federal Reserve raised the nation's key short-term interest rate yesterday, but bank customers probably won't notice it. If the recent past is any guide, only a fraction of that increase is likely to find its way into savers' pockets. With its latest move, the ...

Read all 22 posts in the same category of Banking:

Going Online To Balance Family Budget - Feb 17, 2005
Banks Speed Process For Opening Online Accounts - Feb 04, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Momentum Is Gaining for Cellphones as Credit Cards - Jan 10, 2005
Rebels With A Cause, And A Business Plan - Jan 01, 2005
Banks Boost Customer Incentives, But Rates on Savings Remain Low - Dec 27, 2004
Online Bill Paying: How To Get Started - Dec 27, 2004
Banks Test ID Device for Online Security - Dec 24, 2004
Paper Checks Going Bye-Bye? - Dec 08, 2004
Check It Out: Incentives to Pay Bills Online - Dec 07, 2004
'Gift Cards' May Come Loaded With Fees - Nov 29, 2004
Where To Keep Your Rainy Day Fund - Nov 29, 2004
What's Your Bill-Paying Personality? - Nov 28, 2004
Debit Cards Lack Protections Of Credit Cards - Nov 28, 2004
Automatic Debit Scams - Nov 22, 2004
Bank Accounts Fail To Follow Fed's Lead - Nov 12, 2004
ChexSystems Puts Him In Penalty Box - Nov 09, 2004
"Check 21" Starting in Late October - Nov 03, 2004
Gift Cards 04 - Nov 03, 2004
Save Electronic Checks for Your Taxes - Nov 01, 2004

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