From the June 2004 Idaho Observer:

Important information regarding your checking account...

by The Idaho Observer

From here on out it would be a good idea to start reading the correspondence from the bank holding your checking account. As of July 1, 2004, you may no longer be receiving hard copies of your checks back with your monthly statement.

A letter dated May 25, 2004, from Mountain West Bank to its customers stated, “We are pleased to announce a new look to your statement! Beginning July 1, 2004, if you currently receive your checks back with your statement, you will instead receive copies of the checks -- presorted for your convenience! The checks will appear eight to a page, and we will also include copies of your deposit slips to make balancing even easier!” [Note the exclamation marks].

“The change is in preparation for federally-mandated Check-21, which was signed into law October 28, 2003, and goes into effect this October,” the letter explained. Per Check-21, “many financial institutions will settle images of items through the Federal Reserve instead of actual paper items. The original documents will be destroyed.”

The bank said it is still getting details of the changes and will keep customers apprised in the coming months.

The details must be sketchy at this time because it sounds silly.

The immediate questions are obvious:

* If the original is to be destroyed after copies are made, why make the copies at all -- why not just send the original?

* Why must images of all checks be sent electronically to the Federal Reserve -- isn't a check merely an instrument whereby two parties agree to allow their banks to act as middlemen in the process of completing private transactions?

We intend to have answers to those immediate questions by next month. If you have a checking account, you should consider asking your bank what it plans to do to be in compliance with Check-21. In the meantime, I believe it is safe to assume that, in the interest of homeland security, the originals will not be destroyed and hardcopy records of our financial transactions will be held for safekeeping by the Federal Reserve -- just in case the Department of Homeland Security decides to hang us with them.

Happy banking!

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Hari Heath

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