The days of writing a check on Saturday for money that will be deposited on Monday are over.
Thanks to a federal law called Check 21, starting today, checks can be processed much more rapidly - even on the weekends.
"People who have become accustomed to some kind of float time, they aren't going to have that float time any longer," said Janet Molenda, a district manager at the New Mexico Federal Educators Credit Union.
Because of the faster turnaround, it will be easier to bounce checks, and Check 21 has the potential to hurt a lot of people if they're not careful, Molenda said.
"I know it's not right, but I've learned to rely on those extra days," said Sofia Marrufo, a UNM student.
Marrufo said her paydays don't always correspond with the day her house payment is due, and sometimes she writes a check with the expectation it won't clear immediately.
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Check 21 allows banks to use substitute checks, or images of checks scanned in at the store and transferred electronically. Substitute checks will have the same legal status as regular checks. Original checks are destroyed when substitute checks are used.
Banks and credit unions that use the substitute-check system will still have printed copies, though not all financial institutions are required to participate. Copies of substitute checks or regular checks will still be available to account holders.
According to a New Mexico Educators Federal Credit Union pamphlet, Check 21 was enacted after hundreds of commercial aircraft carrying checks were grounded after the Sept. 11 attacks. Processing came to a halt, according to the pamphlet, which also states the new system will cut the cost of transporting and processing checks by $2 billion per year.
The New Mexico Educators Federal Credit Union will not participate in the new system of image exchange, because it requires too many hardware and software purchases, said Jennifer Gomez, an accounting operations supervisor. Members' checks will still clear more quickly than they're used to, though, because the business they write a check to might be using the new system.
Because some banks will implement the new process, the credit union will have a mixture of substitute and actual checks coming through the system, Gomez said.
Molenda said the new process won't cause problems for workers, but the credit union's biggest concern is making sure members know checks will clear faster.
"Some of them may find out the hard way," she said.
Information about Check 21 was sent out in last month's statements. Molenda said the New Mexico Educators Federal Credit Union is preparing to consider refunding some fees usually charged for bounced checks on a case-by-case basis.
"We don't want to lose our members," she said.
