Don't look for check-hold times to be reduced soon
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Banking industry representatives point out that most banks make funds available right away and that it's only a slim minority of checks that get held.

"In the last couple of years most banks have determined that the majority of deposits coming in are good," says Glen Sgambati, senior vice president at Early Warning Services, in Scottsdale, Ariz. The firm helps financial institutions assess fraud and risk and is owned by Bank of America, Wells Fargo, JP Morgan Chase, Wachovia, BB&T Corp. and First Data.

"They're able to find high-risk transactions, which previously were like a needle in a haystack. Because of that, most banks are providing immediate availability for 97 percent to 98 percent of checks that are drawn on accounts in good standing. The high-risk ones get holds. There may be some pockets where they don't provide (immediate availability) but it's what we see with our banks."

A coalition of consumer groups has asked the Fed to include in its study a number of issues:

• What types of consumers or consumer accounts experience check holds and the impacts on those consumers. • Compare allowable check hold times with the speed with which all types of debits, including checks converted to ACH payments, are made to consumers' accounts. • Consider the effect of inflation adjustments for all the dollar cutoffs and thresholds used in the Expedited Funds Availability Act, particularly the $100 next day availability cutoff and the $5,000 thresholds for longer hold times on larger deposits. • Evaluate whether all "on us" checks should be subject to a shorter hold period to match the period for local "on us" checks. "On us" checks are drawn on an account at the bank where the check is being presented for payment. • Evaluate the effect of weekend check processing on the need for second and fifth business day time periods for local and nonlocal checks.

Until check-hold times shorten, the bottom line for consumers is to be especially vigilant about managing checking accounts. It's easy to deduct checks as we write them; it's a bit tougher to remember to subtract ATM, debit or point-of-sale transactions. Figure out a system -- stick the receipt somewhere in your wallet where you know you'll see it again and remember to deduct it from the checking account.

Make sure deposited checks have not only cleared, but that any hold placed on them has ended or been lifted; be sure the funds are in your account and available. If your online statement is confusing, ask the bank for assistance in determining the actual available balance.

Don't count on float. You don't know how your check payments will be processed; expecting to still have access to some of the money for a short period of time is a dangerous and costly game.

And, finally, sign up for overdraft protection, the kind that's linked to your savings account or credit card.