|
|
Article: The check is dead! Long live the check! A Check 21 update.
- Article from:
- Economic Commentary (Cleveland)
- Article date:
- June 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 Federal Reserve Bank of Cleveland. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
The Check Clearing for the 21st Century Act (Check 21), signed into law in 2003 and effective one year later, was intended to foster innovation in the payments system and enhance its efficiency. Although conceived before September 11, 2001, Check 21 attained new urgency after the terrorist attacks led to the grounding of commercial air travel for several days. During that time, many checks could not be cleared because clearing required that the checks be returned to the paying banks--and timely delivery between regions relied on air transportation. Grounded checks peaked at a value of over $45 billion, highlighting the risks associated with a national payment system ...