John W. Seaburn – 9/6/06

This page was last updated on September 6, 2006.

Something else to remember; John W. Seaburn; Beaver County Times; September 6, 2006.

Below is a detailed critique of the subject letter.

“The Check Clearing for the 21st Century Act passed by Congress and signed into law by President Bush on Oct. 28, 2003, increased the opportunity for identity theft.”

[RWC] I don’t know where Mr. Seaburn gets his info. You’ll see what I mean throughout this critique.

The purpose of Check 21, as the act is known, is to speed up the movement of checks through the check clearing system. It does this primarily by allowing banks to transfer images of checks instead of the checks themselves. Because banks don’t need to send paper checks around, the process is supposed to be more efficient and secure. For example, the shutdown of air transportation after 9/11 hurt the payment system because checks could not be transported or had to be transported by slower means.

For you and me, as far as I can tell here are the biggest changes. Because checks clear faster, the float between the time we write a check and when the funds are deducted from our account is shorter. For example, if your float used to be four days, it might be two days now.

Second, because checks clear faster, the funds for checks you deposit in your account are credited to your account sooner.

“What if you don’t want anything about your personal checks and checking account business being transacted via the Internet? This opens the door for more identity theft and loss of money to crooks who are out there endeavoring all the time to gain illegal access to others’ accounts.”

[RWC] I don’t have a clue what Mr. Seaburn is talking about. The U.S. check clearing system doesn’t use the Internet to transmit data.

“A recent report stated that it cost hard-working American citizens $8.9 billion in identity theft in 2005.”

[RWC] Note Mr. Seaburn didn’t tell us the name of the “recent report.” I could find nothing on the Internet linking Check 21 and identity theft.

“President George W. Bush signed this bill into law before the public knew anything about it; therefore, people did not have an opportunity for input or discussion about the law before it was passed.

“Your bank no longer has to return your original cancelled checks or even a duplicate or photostatic copies of them.”

[RWC] There never was such a requirement. Most banks did return cancelled checks, but some didn’t. If you want/need cancelled checks, find a bank that returns them.

“So, because big business can’t wait a couple of days to get its payment money from your bank and the banks don’t want to provide the services they did previously, Americans all across the country face the increased possibility of identity theft and great loss of money as well as increased costs to do their banking.”

[RWC] Check 21 actually reduces banking costs. Regarding “because big business can’t wait a couple of days to get its payment money,” you and I also get our money quicker. I believe buried in this sentence is Mr. Seaburn’s real gripe. He’s upset his check float is shorter than it was.

“It appears that most of the members in Congress, including U.S. Rep. Melissa Hart and U.S. Sen. Arlen Specter, are more concerned with promoting the financial welfare of big business and the banks than protecting and promoting the welfare of the general public.

“Remember this in November.”

[RWC] I wonder whose talking point this topic is.