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treelover3 Minneapolis, MN(Zone 5a) Oct 23, 2004

The new check process that will take place on October 28th is called "Check 21".

Here is a link to information from the Federal Reserve:

http://www.federalreserve.gov/paymentsystems/truncation/default.htm

When all of the planes were grounded after September 11th, 2001, so were all of the checks and that event brought the flow of money to a stop. Previously, the bank needed to receive the paper check in order to take the funds from your account. This new system will allow the funds to be taken from your account without the actual paper check being presented to the bank. (An electronic image of the check will still be presented for payment.)

Check processing is a cash-cow, for the banks. Since the actual check will no longer need to be presented to the bank to pay the check, the banks will need to find a new way to generate income. People who work as proof machine operators in the banks will lose their jobs since the paper checks will no longer need to be processed manually.

Check 21 will speed up the clearing of checks and it will also speed up the crediting of a deposit into your account, too.

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