Check processing before check 21 legislation Term Paper

decelerate processing originally check 21 legislation - Term Paper compositors casek 21 legislation, previous law was make in a way that banks were forced to borrow Presentment that was a unique check made of paper before transferring funds to other accounts. The hoary Check processing system was exceedingly slow comparing to the electronic system and customers had to wait for their Check clearance for two to three days (Bauer and Gerdes).The check clearing process before legislation 21 was complicated as it requires national Reserve to receive Checks from banks where they have been deposited, sort them in an organized manner, adding the measuring stick of payment for deposited banks and delivering Checks from where there were drawn. This was the main source of income for Federal processing as forward items utilize to bear profits. Before legislation 21, paper Check accounted for more than 60% of the noncash payment in the year 2000. The Federal Reserve System used to proces s large number of paper Checks physically, but even before the emergence of legislation 21, the paper Check processing was declining because of its complications. The customers used to face different types of problems before this legislation, and they were not properly secured against unauthorized payments of paper Checks (Wheelock and Wilson). This legislation brought new measures of safety that the previous system was unable to implement. thither was a fraud case for Hauser Contracting Co. in which a thief obtained Check of stock that was used for paying employees. He made many Checks of payroll and withdrawal more than $24,000. These types of fraud were particularly honey oil when paper Checks was used by the banks (Abagnale). The banks previously were not used to give any canceled Checks back to the customer, and they were nevertheless able to see the documents of Checks that were paid. Another disadvantage of the previous system was that banks were not able to processed claim s made for paper Checks and they used to take more time for investigation. The electronic Check system after