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To: Rarebird who wrote (67864)	4/19/2001 8:36:14 AM
From: long-gone	Respond to of 116979

reducing liquidity while they try to increase it: Banks Move Toward System to Eliminate Grace Period for Check Funds MoneyNews.com Wires April 19, 2001 FORT WAYNE, Ind.--At one time or another, just about anyone who has ever had a checking account has banked on the fact it takes a few days for a check to clear the check writer's account. No more. That little grace period, known as "float," is vanishing as banks and retailers move toward a paperless, electronic system. "Basically, it's a change in the way banks are talking to each other," said Nancy Norris, a spokeswoman for Bank One. The Federal Reserve is pushing the paperless system. "And when the Fed says it's going to do something, pretty much everyone has to toe the line," Norris said. "Electronic check presentment," as the new system is known, means that a check written for a mortgage payment, for example, can be deducted electronically from the payer's checking account as soon as the mortgage holder receives it. There is no lag time for the check to be returned physically to the payer's bank. Bank One has been notifying its customers it will move to the instant electronic notification system here in May. It has already had the system in place in Michigan for three or four years, and in Ohio, for three or four months, Norris said. Some retailers are already using ECP. When a customer writes a check, it is processed through a reading device in the store and the amount is deducted from the person's account instantly -- in the same way funds charged to a debit card would be deducted. With ECP, the retailer knows instantly if the check is good and gains access to the funds without delay. Star Financial, which is based in Fort Wayne, has no immediate plans to move to an electronic check presentment system. But Glenn Bogan, Star's vice president of electronic banking delivery, said that he has run into ECP systems himself when he's written checks to some area retailers. (cont) newsmax.com