Skip to main content

An October surprise -- from the bank

Political Puzzle -- The Front Page: "I know you've done it -- we all have done it. Write a check that you didn't have the funds at the moment to cover, but were intending to deposit the next day. We were taking advantage of what is known as the bank 'float.'

Well, that is coming to a rapid end. On October 25th, the 'Check Clearing for the 21st Century Act' otherwise known as the 'Check 21' law comes into effect.

The current system relies on couriers to transport the actual paper check from bank to clearinghouse to bank before the funds are transfered. For a local check, this process could take up to three days, and up to ten days for an out of state check. People have been taking advantage of this 'float' system for a long time -- essentially giving themselves a 'loan' of money that they didn't actually have.

Under Check 21, this system will be replaced with electronic means. The bank, upon receiving the instrument for payment, will create a 'substitute' check that can be beamed to the payor bank for instant payment, thus erasing this 'float'. That check you write this afternoon will be almost immediately deducted from your account within hours instead of days.


This is liable to cause a lot of insuffient check problems for many consummers who have been giving themselves 'loans' on their money. It is also going to effect a lot of companies also, who take advantage of this float by collecting the interest on their payroll accounts for an extra few days.

My company pays me out of New York. They have a weekly payroll of roughly a million dollars. They purposely have resisted automatic payroll deposits because they know that it takes ten days for a check to clear their account even though the employee gets their money immediately. That is ten additional days that they can collect the interest on a million dollars.

Well, that is going away, and because this windfall 'profit' is going away as well, then it is likely that there will be some kind of belt tightening to compensate for it.

Oh well, I guess that is progress..."

Comments

Popular posts from this blog

Artist turns animals into everyday objects

Ananova - A Chilean artist is making a name for herself with an exhibition in which stuffed animals are transformed into household objects. Artworks on display include a chick turned into a lamp, and 'sheep bag' - a lamb carcass fitted with handles. Artist Caterina Purdy says her exhibition at the Experimental Arts Centre in Santiago is intended to be humorous but also makes a serious point. She told Las Ultimas Noticias online: 'It is possible to see my work as something scary, but I find it beautiful. 'There is also irony and humour in my objects as well as a criticism of the way animals are treated by society.'"

At USDA, the Mouse Is in the House

(washingtonpost.com) : "Employees at the Department of Agriculture's main cafeteria were just sitting down to lunch on Friday when security guards ordered everyone in the huge eatery to leave. Al Qaeda? Bomb scare? No. Mouse droppings. The D.C. Department of Health closed the cafeteria for failing to pass inspection. Yes, the USDA, home to the Animal and Plant Health Inspection Service, the meat and poultry inspectors -- the agency that is part of the federal system for protecting the nation's food supply, was in violation of the D.C. Health Code. There were several citations, according to the inspection report, including: 'water leaking excessively' in the ceiling, employees not wearing hair restraints, and inadequate cleaning of the inside of ice machines, cabinets, surfaces and equipment. The biggest problem, however, seemed to be mouse droppings found everywhere -- in the dry storage room, by the salad bar, behind the ovens, near the serving line, ...
BW Online | March 1, 2004 | Software : "As Stephen and Deepa emerge this summer from graduate school -- one in Pittsburgh, the other in Bombay -- they'll find that their decisions of a half-decade ago placed their dreams on a collision course. The Internet links that were being pieced together at the turn of the century now provide broadband connections between multinational companies and brainy programmers the world over. For Deepa and tens of thousands of other Indian students, the globalization of technology offers the promise of power and riches in a blossoming local tech industry. But for Stephen and his classmates in the U.S., the sudden need to compete with workers across the world ushers in an era of uncertainty. Will good jobs be waiting for them when they graduate? 'I might have been better served getting an MBA,' Stephen says."