Saturday, January 9, 2010

Is there a banker in the house?

because I just got this from Banker's Online . . .

Paperless Fed - A Game Changer for Financial Institutions
Soon the Federal Reserve will be all electronic when it comes to processing checks. No longer will the Federal receive paper cash letters or send financial institutions their daily in-clearing items. The same applies to returned items. It will not be long before the Federal Reserve will make an announcement (very similar to ACH tape decision made in 1993) informing financial institutions that all check related transactions will be transmitted electronically. If your institution is unable to receive your daily files electronically, you will need to designate a processor or correspondent institution to receive your items on your behalf.

This program will address the legal, regulatory, technical and operational impacts of the Fed's elimination of all but one Check Processing Center including but not limited to:

The impact on Funds Availability and bank disclosures (with one processing center, all checks become local checks)
The impact on return items (paper and electronic)
Operational and technical impact on financial institutions that are not image capable
Forward Cash Letters
Return Cash Letters
Presentment by the Federal Reserve and Other financial institutions
Transportation Costs
Federal Reserve Processing Fees
What happens to same day settlement?
What are the processing and other considerations of Non-Cash Items (Collection Items and Foreign Checks)?
What do you do with Bonds, Coupons and Securities?
Bank Float Schedules?

Here is my question . . . will this help to stop more counterfeit cashier's check scams? In the past, what I have been told is that the reason that the banks do not find out that the check is counterfeit for a week or more is because the paper check still has to go through all of the normal processing channels . . . go to the correct clearing house . . . but if it is all done electronically, wouldn't that speed up that process? And if that is so, wouldn't they be able to catch that these checks are counterfeit sooner? (and if so, how much sooner?)

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