Check Clearing for the 21st Century Act - A Wrong Turn in the Road to Improvement of the U.S. Payments System, The

摘要

The Check Clearing for the 21st Century Act\u27 (Check 21 Act) was introduced to Congress by the Federal Reserve System, enacted by Congress, signed by the President on October 28, 2003, and became effective one year later, on October 28, 2004. It makes a modest change in the check-clearing system designed to speed the movement of checks from the depositary to the paying bank. It is anticipated that it will eventually lead to what is called \u22electronic presentment,\u22 a process that may make the clearing of checks almost as swift as to- day\u27s electronic payment systems. This Article gives the authors\u27 views of on the current state of affairs. Part II explains why, with our dazzling array of technological innovations, we have not been able to clear checks instantaneously as we do electronic funds transfers, and why checks must still be physi- cally loaded on trucks, planes, and ships and moved to payor banks. In essence, the burdensome legal system does not allow for a change that has been technologically feasible for years. Part III describes the role that emerging electronic payment methods are playing in the U.S. payments system. Part IV provides a background of the enactment of the Check 21 Act as well as a detailed analysis of it. Part V discusses the impact that the Check 21 Act will have on check payment transactions. Part VI gives the authors\u27 views on what the Federal Reserve should have done rather than engineer enactment of the Check 21 Act. The Article concludes by asserting that the Check 21 Act should not have been enacted. The blame for its enactment should fall squarely on the Federal Reserve Board. The Federal Reserve may never admit this, but it rushed its judgment and used the favor in which it is held by Congress when it proposed the Act. Instead, the Federal Reserve should have proposed legislation which would im- prove the innovative and current electronic payment transactions which are increasingly in use. Issuing the Act to improve the check- clearance process while checks\u27 use is in decline will probably be marked as a mistake in the history of the U.S. payments system.