Letter to Letter to U.S. Senate Committee on Banking, Housing, and Urban Affairs regarding The Check Clearing for the 21st Century Act
June 4, 2003
Members of the Banking Committee
United States Senate
Washington DC 20510
On behalf of the Credit Union National Association (CUNA) and the 82 million credit union members nationwide, I would like to express support for the check truncation legislation the Committee is expected to mark-up on Thursday, June 5th.
As you know, CUNA testified in support of check truncation before the Banking Committee on April 3. Credit unions have been truncating checks, or share drafts, since they first started offering checking accounts in 1977. Although a majority of credit unions already truncate their share drafts (91% truncate, of the 64% of credit unions that offer checking accounts), this legislation would also allow credit unions to truncate more frequently, and at an earlier stage in the check clearing process.
The proposal would revolutionize the way share drafts and checks are processed by increasing the ability of financial institutions to convert paper checks into electronic checks and to use electronic checks in the check collection/return process. Legislation will increase efficiencies in the payment system and allow existing truncation programs, such as those in credit unions, to coexist.
Additionally, check truncation has allowed credit unions to provide members (consumers) with lower fees while still providing outstanding service. In rare cases where members have requested an original, credit unions have been able to provide clear images of the check to satisfy the member's need. In fact, the imaging service that credit unions can offer reduces the time it takes to retrieve checks from 2-3 days to making it nearly instantaneous. Check truncation and imaging also allows credit unions to investigate complaints and resolve disputes more quickly.
CUNA and its member credit unions appreciate the Committee's interest in this issue, and we encourage you to favorably report the bill to the full Senate.
Daniel A. Mica
President & CEO