It's a sweeping new federal law called Check 21. It'll let banks clear your check electronically within a matter of hours after they get it, and few bank customers have any idea what's coming.

No More Floating

Get ready to say goodbye to the "float," or lag time it takes for your check to actually clear your account.

"I maybe have three days. Maybe four," said Kathleen Janzen.

The float's about to fizzle in the wake of an extensive overhaul. Janzen's seen it coming.

"I've been hearing a little bit off and on about the float times getting shorter and shorter," she said.

Check 21 is the nickname for the Check Clearing for the 21st Century Act. Congress passed the law last year. It cuts the processing time, and processing costs of checks.

Banks could save an estimated $2 billion a year.

The new law allows your bank to process your check with 21st century speed, electronically. And in that process, that paper check could literally disappear.

With Check 21, your check will clear within hours.

All banks have to do is make an electronic image and send it through.

If you play the float, and write a check before the money's in your account, "You're in trouble," said Janzen. "And a lot of people are. A lot of people are living from paycheck to paycheck."

Consumer advocates foresee a check bouncing backlash, with millions in bounced check fees. There's also concern about your protection against fraud, or billing mistakes.

"They should be able to generate some kind of a hard copy," said Janzen.

But you may only get a substitute, or a photo copy of that electronic image. With the Check 21 law, your actual check can be discarded.

"If there's a problem, I want a copy (of my check) to do some research and see what's going on with the problem, and how can I resolve it?" Janzen said.

The new substitute checks are considered legal copies but some fear they won't be adequate for proving fraud or forgery.

While Check 21 shortens processing time for banks, it does not shorten the time banks can hold your check when you make a deposit.

The law takes effect October 28th and the Washington Bankers Association tells KOMO 4 News banks here are getting ready. But the banking industry says it'll be a gradual change and it could take several years before electronic check-clearing is an everyday thing.

In the meantime, if you're in the habit of writing checks before the money's in your account, now's a good time to start turning over a new leave.

For More Information:

Questions About Check 21

Introduction To Check 21

Your Checkbook Is Obsolete

Check 21 Resource Center