SPRINGFIELD, IL – Check clearing in the United States will speed up dramatically beginning October 28, causing millions of Americans who don’t know about the new law to be unwittingly charged millions in bounced check fees.
The new federal law, the Check Clearing for the 21st Century Act, automates the check clearing process in the United States. Checks will clear in as little as 24 hours, some on the same day they are written. Many consumers write checks on empty accounts and try to beat the checks to their bank with their next paycheck. Because of Check 21′s increased processing speed, people are going to be assessed with numerous bounced check charges when their checks hit the account before their paycheck.
“The Illinois Small Loan Association (ISLA) is concerned for all consumers because Americans are not being educated about Check 21,” said ISLA President Bob Wolfberg. “Check 21 is being hailed by banks because it will save them many billions in check handling expenses, but banks aren’t warning their customers that increasing check processing will cost consumers millions in bounced check fees.”
Wolfberg recommends that consumers be especially careful when writing checks and make certain that they have sufficient funds in their checking accounts to cover all their checks when they write them. If consumers know that they won’t have funds available to cover checks they must write, Wolfberg suggests that consumers visit any of the more than 500 ISLA member stores in Illinois to get a short-term loan.
“The one-time fee ISLA members charge for a short-term loan is much cheaper than the multiple bounced check fees consumers will be hit with by their banks when Check 21 goes into effect,” Wolfberg said.
