Change in check-hold times is on hold
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While the Fed is required to reduce maximum hold times in tandem with actual reductions in clearing times, there is no set time for them to review this issue again.

ACH transactions include checks used to pay credit card bills and the like, where it shows up on your statement as an electronic transfer. Also included are checks used to pay merchants who run the check through a machine and then hand it back to you. And back-office conversion of checks, which expanded to small businesses in 2007, enables businesses to electronically transfer a check's data to the bank. Direct deposit of paychecks, benefits checks and tax refunds are ACH payments. The Fed says 2.4 billion check conversion transactions took place in 2006 that might otherwise have been collected as checks.

Here are some findings from the Fed's review.

• The number of checks written likely peaked in the mid-1990s and the number of retail electronic payments exceeded the number of check payments for the first time in 2003. • The estimated total value of banks' check-related losses in 2005 was $1 billion, but $711 million after estimated recoveries of losses. Check losses increased even though the aggregate value of checks written has been falling somewhat and the number of checks written has been declining even more quickly. • About 90 percent of all consumer deposits of local and nonlocal checks and half of all deposits of next-day checks are available faster than is required by the Expedited Funds Availability Act. • As of March 2006, at least 93 percent of all checks paid in the U.S. still involved the presentment of a paper check. Banks presented the remaining checks using either electronic check images (2 percent) or electronic check data (5 percent). • Since March 2006, the banking industry's use of electronics to collect and present checks for payments has begun to increase rapidly. In January 2007, approximately 324 million electronic check images and 234 million substitute checks were presented to banks for payments. That represents an almost five-fold increase in the number of electronic check images and a three-fold increase in the number of substitute checks presented to all paying banks in the U.S. during March 2006. • The consolidation of Federal Reserve check-processing regions directly affects when funds must be made available. Checks are categorized as local or nonlocal based on whether the depositary bank and the paying bank are located in the same or different check-processing regions. As a result of consolidation, banks must make more of the funds associated with their customers' check deposits available only one or two business days following the banking day of deposit. The proportion of checks processed by Reserve Banks that would be classified as local or next-day for funds availability purposes increased to 71 percent in late 2006 from 58 percent in 1995. By early 2008, the Board estimates that 73 percent of all checks the Reserve Banks process could be classified as local or next-day.