Thursday, January 20, 2005

Check 21

Maybe you heard about the new rules promulgated by the Federal Reserve Bank regarding clearing of payments through the U.S. banking system.

The banks call it "Check 21". It's formal name isThe Check Clearing for the 21st Century Act (Check 21). It was signed into law on October 28, 2003, and became effective on October 28, 2004. "Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation."

Last night I checked on our checking account balance to make sure that we had a sufficient balance in the account until I deposited Janet's pay check this morning. We did, but there were two unusual entries on the account: an automatic transfer of $7.65 from the savings account to checking, and a $5 charge for an "overdraft protection fee".

What I found out at the Credit Union this morning is that they do what I call "prospective accounting". My account showed a positive balance throughout, but somehow the bank's computers "knew" that there was a charge coming in from the veterinarian yesterday and a few others that hadn't cleared the system yet. I knew that too, but thought that a deposit this morning would cover those before they could clear. Wrong! It didn't used to be that way, and I objected to the teller that it didn't seem right to be charged for something that would happen in the future, i.e., a charge to our account, but hadn't actually happened yet. Not that it did any good, but I felt better venting a little. I plan to take it up with customer service, but will adjust my use of the account to make sure it doesn't happen again.

The credit union here -- Keys Federal CU -- seems to me to be less member-oriented than the one in New Hampshire was. They charge a foreign ATM fee of $1 on debit transactions at the grocery stores, something that Northeast Credit Union did not do, so we have to use our ATM card as a credit card rather than a debit card. It's a small thing, but having to sign a charge slip rather than just use the PIN is an annoyance.

C'est la vie.

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