With the new Check 21 Law Small Businesses that receive a large volume of their payments by check will greatly benefit from having a remote deposit terminal at their business location. This allows the business to transform a paper check into a substitute check and send that digital substitute check zipping through the bank processing network at the speed of light.
The new law officially goes into effect Thursday October 28, 2004 and it could change the way you bank.
If you have gotten into the habit of floating checks, the new Law could cost you a lot of money in overdraft charges.
Check 21 and Cash Float
Float is the word used when someone writes a check, knowing they don't have the money in their account at the moment to cover the check, but take a chance that their paycheck will be deposited by the time their check clears.
Now, with the new Law when you go into a merchant to purchase an item with your check, it's going to be electronically imaged and it will be sent back to the bank immediately.
So, what used to take days, now could take a matter of minutes.
The other change, with the new Law will be that you won't get your canceled checks back. Some banks may return electronic images or substitute checks. Some banks will charge for this service, so check with your bank for their policy.