|Check 21: New law ends checking
The only customers that banks are required to notify about
Check 21 changes are those who receive their original checks with
their statements and those who have a dispute and request a copy
of their original check.
The ABA says many institutions will be alerting all of their checking
account customers to changes that will come with Check 21. During
interviews for this article, both Washington Mutual and Bank of America
said they would be notifying all of their checking account customers
about Check 21.
Many banking sites already have detailed information
about Check 21 and what it will mean to consumers. Some sites are
better than others. Gulf
Coast Educators Federal Credit Union in Pasadena, Texas, makes
it quite clear that there's an increased risk of checks bouncing
because they'll clear sooner.
"We try to do that as a credit union -- be upfront
and progressive with our members," says Terrie Wollard, senior
vice president. "We always try to educate our members that
when writing checks there's nothing to stop the merchant from coming
in directly and getting their money. People have to assume responsibility,
but we're trying to help the transition to Check 21."
Customers who provide the credit union with an e-mail
address will be notified if there are insufficient funds to cover
a check and they'll be given a few hours to do something about it.
"We'll e-mail you in the morning and give you
the chance to make a deposit and have the check late paid for a
$6 fee," says the credit union's Web site.
According to Wollard, it's all part of providing good
"We're member-centered, so the decision wasn't
a difficult one. We need the fee income like most institutions to
help us stay viable. But we're not looking to gouge customers."
Even though paper and electronic checking systems
may coexist for several years, it's evident that the paper check's
traveling days are numbered. There was a time when credit card receipts
were returned with the monthly statement. No doubt consumers will
become accustomed to relying on copies of checks to resolve disputes
the same as they now have to rely on copies of credit card receipts.
As Mark Budnitz put it, banks can make this process
easy or they can make it miserable. If your bank tries to make it
miserable and you know you're in the right, complain.
If the issue isn't resolved contact the appropriate
It's far more likely that the bulk of problems under
Check 21 will arise from consumers getting dinged by nonsufficient
funds fees. It's critical that consumers make sure there's enough
money to cover checks. Few institutions will zap you an e-mail and
generously give you a few hours to make good on a check that's over
your balance. Most will sock you with a hefty nonsufficient funds
Good money management will help save you money and,
for consumers at least, make the hoopla over Check 21 as overblown
as the Y2K kerfuffle.