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New check-clearing law bounces usual float time; Electronic substitute initiated gradually; Carver remains postal.(Finance)(Column)
Crain's New York Business, October, 2004 by Fredrickson, Tom
Byline: tom fredrickson The time that banks take to process checks is about to decline, and more bounced checks could be the result. On Oct. 28, the federal Check Clearing Act for the 21st Century-also known simply as Check 21-takes effect. For the first time, it requires banks to be able to accept electronic substitutes for the traditional paper checks that are submitted to them by other financial institutions.
The change is expected to allow banks to clear checks in as little as one day, compared with a current float time that runs to two to three days. "It's very possible that customers will see their checks clearing sooner than they do now,'' says Thomas Gregory, a vice president at Commerce Cash Management, a unit of Cherry Hill, N.J.-based Commerce...
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