{
  "id": "RL31591",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL31591",
  "active": false,
  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 101393,
      "date": "2003-11-08",
      "retrieved": "2016-04-08T14:34:26.777544",
      "title": "Electronic Banking: The Check Truncation Issue",
      "summary": "The clearing process for checks is more expensive than other methods of payment which are\ncleared\nelectronically, such as credit cards and Internet banking. The main reason is that check clearing\nrequires banks to physically present and return checks unless they obtain legal agreements to clear\nelectronically. The Check Clearing for the 21st Century Act of 2003 ( P.L. 108-100 ) eliminates the\nrequirement to physically return the original checks to the paying bank. Before the bill by the same\ntitle became law, on April 3, 2003, the Senate held its first hearing on the Fed's Check Truncation\nAct (CTA) proposal that was sent to banking committees of both Houses in December 2001. On\nJune 5, 2003, the House passed  H.R. 1474  and referred it to the Senate Committee on\nBanking, Housing and Urban Affairs. On June 18, 2003, at a markup, the Senate Banking\nCommittee approved its Check Truncation Act of 2003 ( S. 1334 ) and on June 27, 2003,\nthe full Senate passed  S. 1334  and incorporated it in  H.R. 1474 . On\nOctober 1, 2003, House and Senate conferees reported  H.R. 1474  (Conference Report\n H.Rept. 108-291 ). On October 28, 2003, President Bush signed the Check Clearing for the 21st\nCentury Act ( P.L. 108-100 ) into law, which is now also known as Check 21 Act.\n  Estimates of cost savings from moving to electronic check clearing vary widely because\nestimates of the cost of using a check and the number of checks written each year remain in dispute. \nConsequently, estimates of cost savings range from $1.4 billion annually for truncation alone to $68\nbillion for replacing checks with electronic payments. In testimony at the hearing of Senate and\nHouse banking committees in the 108th Congress, the Fed's CTA in the Senate and  H.R. 1474  in the House were supported by the Federal Reserve Board, which testified that it would like\nto remove some of the consumer protection provisions that were in its 2001 proposal because they\nwere unnecessary. The Fed argued that the regulatory costs these provisions would place on banks\nwould outweigh the consumer benefits. Still, the bill is supported by America's Community\nBankers, the American Bankers Association, the Consumer Bankers Association, and the Financial\nServices Roundtable.\n  The opposition to the Check 21 Act came from the Consumers Union, supported in its\ntestimony by the Consumer Federation of America, the U.S. Public Interest Research Group, and the\nNational Consumer Law Center. The Consumers Union argued that the Act would make it\nimpossible for an estimated 45.8 million U.S. households who are currently getting their paper\nchecks back to continue to do so. These consumers would be less protected from fraud under the\nAct than under the existing check clearing process when there are disputes about check payments.\nThe Consumers Union's suggested changes in the proposed legislation would significantly increase\nconsumer protection. At the same time, these changes would increase financial institutions' costs\nof voluntarily adopting check truncation. Other witnesses argued that those banks with decades of\nusing truncated checks have not experienced many disputed check payments, and when they did they\nwere quickly resolved.\n  This report will be updated as legislative and financial developments warrant.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metacrs4656/",
      "id": "RL31591 2003-10-03",
      "date": "2003-10-03",
      "retrieved": "2005-06-11T11:25:00",
      "title": "Electronic Banking: The Check Truncation Issue",
      "summary": "If all checks were replaced by electronic transactions, the exact cost savings would still be unknown, because estimates of the cost of using a check and the number of checks written each year remain in dispute. Consequently, estimates of cost savings range from $1.4 billion annually for truncation alone to $68 billion for replacing checks with electronic payments. A significant part of the savings comes from eliminating the handling, sorting, and physically transporting of checks to the paying bank. To clear checks electronically, banks must negotiate processing agreements thatmake it unnecessary to physically present the paper check. Since the benefits are not uniformly dispersed among the participants, banks have found it difficult to obtain these agreements, thus constraining the widespread adoption of electronic check clearing.",
      "type": "CRS Report",
      "typeId": "REPORT",
      "active": false,
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      "topics": [
        {
          "source": "LIV",
          "id": "Finance",
          "name": "Finance"
        },
        {
          "source": "LIV",
          "id": "Checks - Law and legislation",
          "name": "Checks - Law and legislation"
        }
      ]
    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metacrs4655/",
      "id": "RL31591 2003-07-03",
      "date": "2003-07-03",
      "retrieved": "2005-06-11T11:24:30",
      "title": "Electronic Banking: The Check Truncation Issue",
      "summary": "If all checks were replaced by electronic transactions, the exact cost savings would still be unknown, because estimates of the cost of using a check and the number of checks written each year remain in dispute. Consequently, estimates of cost savings range from $1.4 billion annually for truncation alone to $68 billion for replacing checks with electronic payments. A significant part of the savings comes from eliminating the handling, sorting, and physically transporting of checks to the paying bank. To clear checks electronically, banks must negotiate processing agreements thatmake it unnecessary to physically present the paper check. Since the benefits are not uniformly dispersed among the participants, banks have found it difficult to obtain these agreements, thus constraining the widespread adoption of electronic check clearing.",
      "type": "CRS Report",
      "typeId": "REPORT",
      "active": false,
      "formats": [
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      "topics": [
        {
          "source": "LIV",
          "id": "Finance",
          "name": "Finance"
        },
        {
          "source": "LIV",
          "id": "Checks - Law and legislation",
          "name": "Checks - Law and legislation"
        }
      ]
    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metacrs4653/",
      "id": "RL31591 2003-05-30",
      "date": "2003-05-30",
      "retrieved": "2005-06-11T11:24:01",
      "title": "Electronic Banking: The Check Truncation Issue",
      "summary": "If all checks were replaced by electronic transactions, the exact cost savings would still be unknown, because estimates of the cost of using a check and the number of checks written each year remain in dispute. Consequently, estimates of cost savings range from $1.4 billion annually for truncation alone to $68 billion for replacing checks with electronic payments. A significant part of the savings comes from eliminating the handling, sorting, and physically transporting of checks to the paying bank. To clear checks electronically, banks must negotiate processing agreements thatmake it unnecessary to physically present the paper check. Since the benefits are not uniformly dispersed among the participants, banks have found it difficult to obtain these agreements, thus constraining the widespread adoption of electronic check clearing.",
      "type": "CRS Report",
      "typeId": "REPORT",
      "active": false,
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          "filename": "files/20030530_RL31591_3c8a0b266b89880a51b3138501970ad9243febed.html"
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      ],
      "topics": [
        {
          "source": "LIV",
          "id": "Finance",
          "name": "Finance"
        },
        {
          "source": "LIV",
          "id": "Checks - Law and legislation",
          "name": "Checks - Law and legislation"
        }
      ]
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}