| How the New Check 21 Law Affects You Check It Out: New Banking Law Soaks Consumers By Suze
Orman
Any civics teacher looking for a glaring real-life example of Congress listening to lobbyists and forgetting about we the
people need look no further than the new "Check 21" law that kicked into action in late October.
In a big fat wet kiss to the banking industry, Congress has authorized electronic processing of all the personal checks
you
and I write, meaning banks no longer have to physically exchange checks with each other before they take the money out of
our accounts. That cuts the processing time down from a few days to as little as a few hours. One industry group estimates
the faster processing will save banks $2 billion a year in administrative costs. It's a lot cheaper to zap checks
electronically to each other than to deliver them by train, plane, and truck.
I'm all for efficiency, but surprise, surprise, there's absolutely no provision that requires one penny of that savings
to
be shared with consumers in the form of lower fees. Worse, there's a good chance this new bill is going to end up costing a
lot of us a bunch of money. Because our checks are clearing so much faster, consumer watchdogs predict that there is also
going to be a barrage of bounced checks flying through the system, further boosting the bottom line of the banks at the
expense of our wallets.
Let me explain.
Say Goodbye to Float
We are a nation of master floaters. You know what I am talking about: you write your checks on Monday to pay the rent,
cable, and utility bills—even though you aren't getting paid until Wednesday. No worries, you figure, because by the
time the checks have cleared through the banking system your paycheck will have arrived in your account. more...
Article also contains: - Bouncing All the Way to the Banks' Bottom Lines
- The Check is Not in the Mail
Rules to Bank On
Okay, if Washington won't look out for you, let me offer up some ways to protect yourself. more...
Suze Orman has been called “a force in the world of personal finance”
and a “one-woman financial advice powerhouse” by USA Today. She is the author
of four consecutive New York Times bestsellers, including The Road to Wealth.
Suze Orman, a
Certified Financial Planner Professional®,
directed the Suze Orman Financial Group from 1987-1997, served
as
Vice President of Investments for Prudential Bache Securities from
1983-87, and from 1980-83, was an Account Executive at Merrill Lynch.
Watch Suze every Saturday night on CNBC.
Check www.suzeorman.com
for TV listings.
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