# No "float" on checks after 10/28? **URL:** \ **Category:** Great Debates\ **Created:** [October 23, 2004, 1:28am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714 "2004-10-23T01:28:52Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Ignatz](https://avatars.discourse-cdn.com/v4/letter/i/3be4f8/32.png) [@Ignatz](https://boards.straightdope.com/u/Ignatz)\ **Post date:** [October 23, 2004, 1:28am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/1 "2004-10-23T01:28:52Z")
Part of two pages of info received at work: Is it for real? Is it common knowledge? Does anybody care or are you all doing only epayment already? It’s called “Check 21”. "A new law goes into effect on 28 Oct and all checks will be cleared electronically within minutes… even at night, even on weekends. If payday is Monday and you write a check at the grocery store on Saturday assuming it won’t clear before your paycheck is in you will be wrong-that check will bounce. And you will be charged overdraft fees. Be aware of what you are doing and the affect it could have on your credit rating or career. Make sure funds are available before you write a check. \<[http://www.consumersunion.org/finance/ckclear1002.htm](http://www.consumersunion.org/finance/ckclear1002.htm) [\<[http://www.federalreserve.gov/paymentsystems/truncation/default.htm](http://www.federalreserve.gov/paymentsystems/truncation/default.htm)\> " ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [October 23, 2004, 3:04am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/2 "2004-10-23T03:04:49Z")
> [@Ignatz](#): > > Part of two pages of info received at work: > > Is it for real? Is it common knowledge? Does anybody care or are you all doing only epayment already? It’s called “Check 21”. > > "A new law goes into effect on 28 Oct and all checks will be cleared electronically within minutes… even at night, even on weekends. If payday is Monday and you write a check at the grocery store on Saturday assuming it won’t clear before your paycheck is in you will be wrong-that check will bounce. And you will be charged overdraft fees. Be aware of what you are doing and the affect it could have on your credit rating or career. Make sure funds are available before you write a check. > > \<[http://www.consumersunion.org/finance/ckclear1002.htm](http://www.consumersunion.org/finance/ckclear1002.htm) > > [\<[http://www.federalreserve.gov/paymentsystems/truncation/default.htm](http://www.federalreserve.gov/paymentsystems/truncation/default.htm)\> " It’s for real. The local news (WMUR) did a story on Check 21 it three weeks ago saying pretty much the same thing, with a warning that you can’t safely post-date checks anymore. ---
**Author:** ![levdrakon](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@levdrakon](https://boards.straightdope.com/u/levdrakon)\ **Post date:** [October 23, 2004, 3:18am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/3 "2004-10-23T03:18:37Z")
The extra sweet thing is how checks you write clear immediately, but checks you deposit, while also clearing immediately, can still be “held” by your bank, thereby making your own money unavailable to you. Aren’t banks nice? ---
**Author:** ![Nobody](https://avatars.discourse-cdn.com/v4/letter/n/94ad74/32.png) [@Nobody](https://boards.straightdope.com/u/Nobody)\ **Post date:** [October 23, 2004, 4:23am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/4 "2004-10-23T04:23:55Z")
To bad this isn’t the pit thread, I have a few choice words for most Banks. Besides being on my Wife’s Credit Union account, I have my own B of A account. I haven’t really used it much in a long time, but when I did, they were good at clearing my deposits after clearing my withdraws, thus, more than one trip to the bank to get the charges reversed. Of course I’ve read on this board that B of A is notorious for this kind of thing. But, back to the topic at hand, why is Check 21 happening? The **only** reason I can think of is for banks (and maybe Credit Unions) to be able to collect more money in fees for bounced checks or overdrawn funds. What the justification from its supporters? ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [October 23, 2004, 4:40am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/5 "2004-10-23T04:40:40Z")
> [@Ignatz](#): > > If payday is Monday and you write a check at the grocery store on Saturday assuming it won’t clear before your paycheck is in you will be wrong-that check will bounce." Writing that check was already illegal. This is simply a way to enforce the existing law. ---
**Author:** ![Nobody](https://avatars.discourse-cdn.com/v4/letter/n/94ad74/32.png) [@Nobody](https://boards.straightdope.com/u/Nobody)\ **Post date:** [October 23, 2004, 4:44am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/6 "2004-10-23T04:44:08Z")
> [@jsgoddess](#): > > Writing that check was already illegal. This is simply a way to enforce the existing law. Illegal? I thought that only postdating checks in some instances is illegal. If you write a check on the 2nd for the 2nd but won’t get paid for a day or two, but yet the store won’t cash the check untill two or three days later, how is that illegal? ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [October 23, 2004, 4:55am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/7 "2004-10-23T04:55:36Z")
> [@Master Control](#): > > Illegal? I thought that only postdating checks in some instances is illegal. If you write a check on the 2nd for the 2nd but won’t get paid for a day or two, but yet the store won’t cash the check untill two or three days later, how is that illegal? If you write a check against an account that doesn’t have the fund in it at the time the check is written, that’s check kiting. ---
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [October 23, 2004, 4:56am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/8 "2004-10-23T04:56:31Z")
> [@](#): > > **Master Control** : I thought that only postdating checks in some instances is illegal. If you write a check on the 2nd for the 2nd but won’t get paid for a day or two, but yet the store won’t cash the check untill two or three days later, how is that illegal? Post-dating means that you write a check on the 2nd but you put the date as the 3rd or 4th. At any rate, with the new law, our deposits will need to be credited to our accounts and the funds must be available to us **before** we write checks. The check may go through immediately even on a Saturday or Sunday. That’s not a bad policy anyway. ---
**Author:** ![jayjay](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jayjay/32/6765_2.png) [@jayjay](https://boards.straightdope.com/u/jayjay)\ **Post date:** [October 23, 2004, 5:13am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/9 "2004-10-23T05:13:49Z")
I would personally like to see a banking regulation that requires them to post deposits before they post debits on the same day, instead of holding onto everything and then posting the debits first so they could collect their damn $30 a check before they put my money in. ---
**Author:** ![levdrakon](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@levdrakon](https://boards.straightdope.com/u/levdrakon)\ **Post date:** [October 23, 2004, 5:21am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/10 "2004-10-23T05:21:43Z")
> [@Zoe](#): > > At any rate, with the new law, our deposits will need to be credited to our accounts and the funds must be available to us **before** we write checks. How is it not a bad policy for me to deposit a check on Friday, write a check on Monday and have it bounce because, “surprise! we decided to hold your money until Tuesday?” We get your money instantly, but you don’t get your money until we’ve let a few of your checks bounce. Floating checks was always wrong, BTW, and lots of businesses have been cashing checks instantly for years. I have no problem with that. ---
**Author:** ![1010011010](https://avatars.discourse-cdn.com/v4/letter/1/ea666f/32.png) [@1010011010](https://boards.straightdope.com/u/1010011010)\ **Post date:** [October 23, 2004, 6:48am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/11 "2004-10-23T06:48:02Z")
Check kiting is not merely writing a check against non-existant (or not yet existant) funds. It’s a rather more involved process involving shifting money between various bank accounts and depending on the delays (or more specifically, the mismatch in the delays) to make it seem like you have more money in the system than you actually do. You can then withdraw your money this “extra” money and skip town. Various banking regulations will make certain kinds of behaviour flag (frequent transations, transactions greater than a larger amount, periodic transactions of identical amounts, etc) which limit the haul available from any one bank with this scheme. You can open more accounts at many different banks and so increase your cap, but the system of shell accounts becomes increasingly difficult to maintain. Enter computers, the internet, and online banking. With computers it becomes possible to manage an arbitrarily large number of accounts in the exchange network. With the internet it’s possible to have accounts around the world (which improved the delay time and breathing room). Online banking makes it easy to consolidate all of the phantom cash into one account and skip out very quickly. Then came the insight. Suppose you maintain your artificially inflated account balances indefinitely and collect the calculated interest? Slow going, true, but nothing apparently illegal going on, especially with a large automated network of accounts managed to appear like legitimate traffic. Actually it’s unclear if it really is illegitimate traffic or that what you’re doing actually is illegal. Attempts to change the way banks operate to prevent this have proven to be too expensive or unpopular or merely ineffective. Calculating interest with the lowest balance during the period, holding deposits, etc. By shrinking the clearance window to minutes (rather than, say, days), it makes it basically impossible to maintain the inflated balances without causing the account activity to flag. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 23, 2004, 8:34am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/12 "2004-10-23T08:34:15Z")
Would you like to know how much your bank makes, annually, on overdraft extortion? Try and find out. Go ahead, just try. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 23, 2004, 8:50am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/13 "2004-10-23T08:50:50Z")
What’s the problem? Why should someone else (the recipient of your check) have to carry your burden for you? Don’t write checks for money you don’t have. Wait until your deposits clear to draw the funds. Keep a thousand dollar or so minimum balance and/or overdraft protection if you can’t control yourself. ---
**Author:** ![Typo\_Negative](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/typo_negative/32/484_2.png) [@Typo\_Negative](https://boards.straightdope.com/u/Typo_Negative)\ **Post date:** [October 23, 2004, 10:13am UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/14 "2004-10-23T10:13:33Z")
I see this as a good thing. I hate waiting for the checks I write to clear. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [October 23, 2004, 2:11pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/15 "2004-10-23T14:11:07Z")
Liberal, let’s say you write me a personal check for $50 on Monday. I deposit it on Monday. Tuesday morning your account is $50 lighter, thanks to Check 21. My account isn’t $50 heavier, though, the bank is still allowed to hold that check before crediting my account, just as before. I can’t write a check on that $50 until Wednesday, maybe Thursday, depending on when it clears. Where is the money? It’s in a bank, earning interest for them, when it should either be in your account or mine. ---
**Author:** ![Harborwolf](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@Harborwolf](https://boards.straightdope.com/u/Harborwolf)\ **Post date:** [October 23, 2004, 2:28pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/16 "2004-10-23T14:28:05Z")
As I was told at my bank, the way around this is to cash your paycheck or whatnot and then deposit the cash. Cash deposits into your account quicker than a check. I do think that there needs to be a corresponding law making money available when deposited. This lack of floating seems to benefit the banks more than anything. :dubious: ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [October 23, 2004, 2:32pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/17 "2004-10-23T14:32:54Z")
I also find it unfair that checks you write are cleared instantly, but deposits can be held. However, I found that through my on-line banking, I _can’t_ pay an online bill today and have it clear tomorrow. The bank needs three or four days to process the information, so the first couple of available dates are greyed out. So, you can still do a form of “check-kiting” on line, although it’s not, really. I can set up on Wed to have all my bills paid on Monday, even though I won’t be paid until Friday. It’s kind of like post-dating a check. ---
**Author:** ![Nobody](https://avatars.discourse-cdn.com/v4/letter/n/94ad74/32.png) [@Nobody](https://boards.straightdope.com/u/Nobody)\ **Post date:** [October 23, 2004, 3:36pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/18 "2004-10-23T15:36:31Z")
> [@Harborwolf](#): > > As I was told at my bank, the way around this is to cash your paycheck or whatnot and then deposit the cash. Cash deposits into your account quicker than a check. You should have asked them about those of us with direct deposit. We can’t cash the check first. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [October 23, 2004, 3:38pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/19 "2004-10-23T15:38:46Z")
Summing up opinions from a few other posters, I think this is a fine piece of work WRT the time thing. My problem is not floating checks, but floating checks because checks I deposit take so damn long to clear… which is now not a factor, either, so yay. My deposit happens quicker, then I have no need to float. I would like to see, like **jayjay** , banks being required to handle deposits before debits. The operation is mathematically equivalent, they just chose it to help them collect overdrafts. Rubbish. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 23, 2004, 3:58pm UTC](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714/20 "2004-10-23T15:58:51Z")
> [@Cheesesteak](#): > > Where is the money? It’s in a bank, earning interest for them, when it should either be in your account or mine. Agreed. But that is different from the issue raised to which I responded, concerning the matter of wishing to be able to write a check before the funds are available. It sucks that the deposits are held up, but that fact is not mitigated by passing worthless checks to other parties. [Next page](https://boards.straightdope.com/t/no-float-on-checks-after-10-28/270714.md?page=2)