cartoon by Adam Omernik
“Check 21,” a new law that went into effect last month, will allow banks to process checks electronically, making it harder for consumers to avoid bouncing the checks. It can now take seconds after writing the check for an institution to deduct the amount from an account, instead of taking days. This law will benefit the banks, but it will do so at the expense of their customers.
For instance by creating electronic images of the checks, banks will not have to pay the expensive cost of transporting the paper checks.
However, the benefits for the consumers are not as great. While we know it’s illegal to write a check for more than we have in the bank, many of us do it anyway. Then they would deposit that amount at a later time to cover the amount they have written on the check. The time between when the check is written and when the money is actually transferred is known as the “float” time. Before this law, the float time was two to 11 days. Now it is a few seconds to a few hours.
Students just getting used to managing money may need the extra “float” days to pay their bills without getting fined. Attending school full-time takes away from the time they are able to go to work. Because of this, their income may not be enough to pay their bills and they might need that extra time to get more money together.
According to the Consumers Union, consumers could be bouncing seven million more checks next year and paying an additional $170 million in fees each month because they are not accustomed to the system.
This is another example of the consumers having to spend more money for laws they are not benefiting from. The consumers already pay enough from other fees, such as the fee for withdrawing money from an ATM besides that of our banks or the fee for depositing a bounced check received by a person. Isn’t the consumer spending enough on these fees?
In addition, when the checks become electronic images, the processed checks are not returned to the consumers. If consumers need copies of their checks to prove they paid a bill, they will need to ask for a “substitute check.” It is possible that a financial institution can make the consumer pay a fee for the substitute check.
Why should the consumers have to pay a fee for a substitute check when it’s not our idea to process the checks electronically? Normally, we would receive the processed checks. So why can’t we receive them now? They wanted to process the checks electronically to allow the banks to save money, but by doing this consumers are spending more money. The consumers will need to pay for the bouncing fees, the substitute check fees and who knows what other fees they will think of. Why should we have to pay for something that is not benefiting us in the first place? Especially a substitute check, which we would normally have in our hands after the check is processed.
The “Check 21” law was not highly reported or publicized when it went into effect. How can they expect to put this law into the system without notifying those who will be greatly affected, the consumers?
Why should the consumers be fined for an idea that they did not approve? Why should they pay for having their money taken out of their accounts quicker? After all, isn’t that what the consumers are paying for?