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Letter to Representatives Melissa Hart and Harold Ford Jr regarding The Check Clearing Act for the 21st Century

Letters to Congress

Letter to Representatives Melissa Hart and Harold Ford, Jr. regarding The Check Clearing Act for the 21st Century

April 4, 2003

The Honorable Melissa Hart
1508 Longworth House Office Building
Washington, DC 20515

Dear Congresswoman Hart:

On behalf of the Credit Union National Association (CUNA) and the 82 million credit union members nationwide, I would like to thank you for your introduction of H.R.1474, The Check Clearing for the 21st Century Act.

Credit unions have been truncating checks, or share drafts, since they first starting 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.

Check truncation legislation would revolutionize the ways share drafts 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. This 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.

Again, thank you for the introduction of H.R. 1474. Your understanding and support of increased efficiency within our nation's payments system is appreciated.

Thank you,

Daniel A. Mica
President & CEO

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