ACB, ICBA JOIN IN SUPPORTING PRINCIPLES OF ELECTRONIC CHECK CLEARING LEGISLATION
Joint News Release
Independent Community Bankers of America
America’s Community Bankers
Contacts: ACB — Robert Schmermund, (202) 857-3104; ICBA — Viveca Ware, (202) 659-8111.
WASHINGTON, DC (April 8, 2003)—The Independent Community Bankers of America (ICBA) and America’s Community Banks (ACB) joined today in support of legislation to promote increased efficiency and potential cost savings through greater use of check truncation.
“We strongly support the efforts to increase the efficiency of the nation’s payments system, and we believe that through this proposed legislation, Congress can create significant cost savings and efficiencies that will benefit both consumers and financial institutions,” said C.R. (Rusty) Cloutier, president of MidSouth National Bank, Lafayette, La.
Cloutier testified at a hearing of the Subcommittee on Financial Institutions and Consumer Credit of the House Financial Services Committee on the Check Clearing for the 21st Century Act.
ICBA and ACB, along with the other financial services trade associations, are united in support of the general principles outlined in the proposed legislation, which would allow a collecting bank to remove – or truncate – the original paper check from the check collection process and enable the entire banking industry to use electronic images to process and clear checks.
“Processing checks has become extremely costly and burdensome for the nation’s financial institutions,” said Cloutier. “[It] is a labor intensive process of handling, sorting and physically transporting checks. Check truncation and electronic processing would significantly reduce this cost and burden.”
The proposed legislation would streamline the collection and return of checks, reduce processing costs and minimize the effect of unexpected disruptions to air and ground transportation systems. Moreover, the legislation does not mandate electronic check clearing, but provides flexibility, on a bank-by-bank basis, to adapt to electronic check clearing over time without interfering with the existing paper check process.
Cloutier also recommended retaining the check collection system’s existing body of law and regulation. “There have been no significant consumer issues relating to the receipt of images or electronic representations of return check items, and there is no evidence to justify changing the existing law … .” With respect to the proposed expedited re-credit provisions in the legislation, Cloutier stated, “We believe that the new re-credit procedures are complicated and would only serve to confuse customers, create an unnecessary burden for banks and expose banks to sophisticated fraud schemes. More importantly, according to testimony given by Federal Reserve Board Vice Chairman Roger Ferguson last week before the Senate Banking Committee, the Board has now concluded that the expedited re-credit provisions it originally suggested are not necessary.”
Cloutier urged members of the committee to improve the efficiency of the nation’s payments system by quick passage of the proposed legislation, which has the broad support of the banking industry and the Federal Reserve Board.
About the Represented Organizations
America's Community Bankers
America's Community Bankers represents the nation’s community banks. ACB members, whose aggregate assets total more than $1 trillion, pursue progressive, entrepreneurial and service-oriented strategies in providing financial services to benefit their customers and communities.
Independent Community Bankers of America
The Independent Community Bankers of America is the nation’s leading voice for community banks and the only national trade association dedicated exclusively to protecting the interests of the community banking industry. We aggregate the power of our members to provide a voice for community banking interests in Washington, resources to enhance community bank education and marketability, and profitability options to help community banks compete in an ever-changing marketplace. ICBA has nearly 5,000 members with 17,000 locations nationwide. Our members hold more than $526 billion in insured deposits, $643 billion in assets and more than $405 billion in loans to consumers, small businesses and farms.
America’s Community Bankers is the national trade association committed to shaping the future of
banking by being the innovative industry leader strengthening the competitive position of
community banks. To learn more about ACB, visit
www.AmericasCommunityBankers.com.
-30-
|
