So those of you who like to write checks on empty accounts 2 days before payday better watch out
Check Clearing for the 21st Century Act
About | Frequently Asked Questions
The Check Clearing for the 21st Century Act (Check 21) was signed into law on October 28, 2003, and will become effective on October 28, 2004. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. The law facilitates check truncation by creating a new negotiable instrument called a substitute check, which would permit banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks. A substitute check would be the legal equivalent of the original check and would include all the information contained on the original check. The law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the act to create substitute checks.
The Federal Reserve Board has released the final rule to implement Check 21, including the model disclosure language for depository institutions to use in notifying consumers of their rights under the law.
Final Amendments to Regulation CC to Implement the Check Clearing for the 21st Century Act
Additional information regarding Check 21:
Request for comment on amendments to Regulation J
Proposed Rule to Implement the Check Clearing for the 21st Century Act
Check Clearing for the 21st Century Act (Check 21); PL 108-100, enacted October 28, 2003 (71KB PDF)
Conference Report (92KB PDF)
Report of the Senate Banking Committee (48KB PDF)
Report of the House Committee on Financial Services (90KB PDF)
From what i understand about this act, be sure you gots money in your checking acct, because in many instances, the check you write could clear that night, or you could be socked with bounced check fees.
And just so they can stick it to you even more, banks process transactions in this order
Largest Checks written first then smaller checks - This means that if a big check bounces, then everything after it will too. More NSF penalties for the bank
THEN deposits are processed - So if you make a deposit to cover one of those big checks above, well it's too late because that check has already bounced