New Checking Law Eliminates "Float" Period

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Under the traditional system, when you write a check to, say, the supermarket, or to your landlord, or the electric company, that check begins a whirlwind of a journey.

From the store, it first goes to the store's bank...then to that bank's processing on to your bank's processing center...before finally coming to a rest in your monthly statement.

But thanks to technology, that physical transportation system could come to end.

"After the change on Thursday, it will go from the supermarket to their bank. And from their bank, it will be possible that it will be processed electronically and destroyed at that bank at that point," says Marsha Adams, the Branch Manager at Reno's US Bank.

She says that means bank customers will no longer get their original checks back, but instead will receive "substitute checks." "There is a stamp on it that will say that this is a legally binding document, that this is a legal copy of your original check."

The Check 21 legislation was designed by Congress after the attacks on 9/11 halted ground and air transportation. The goal is to improve banks' check processing efficiency.

When this new law goes into effect on Thursday, your check could be processed as soon as the day after it's received. This brief turn around time could catch many people off-guard if they write checks without having enough money in the bank to cover them.

Starting Thursday, October 28th, all banks will comply. But that doesn't mean all customers and all checks will see a change. US Bank for example, hopes to process 5% of its checks electronically for the first year.