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10-28-04 - NEW YORK (AP) Don't write a check you can't cover now. A new check processing system goes into effect Thursday that speeds the time it takes for a check to clear.
Consumer advocates say Americans need to closely watch their accounts to avoid bouncing checks and racking up fees and penalties.
The Check Clearing for the 21st Century Act, better known as Check 21, lets financial institutions exchange electronic images of checks rather than the paper itself.
Consumers who still get checks back with bank statements will likely begin seeing images of some checks among the paper ones.
It could take years for the entire system to kick in. An expert at Forrester Research estimates it will be the end of the decade before all banks and credit unions digitally process checks from start to finish.
Consumer advocates also say people need to watch statements to be sure no checks are debited twice.