The Consumer and the Checking Account Fairness (CCAF) Act Essay

The Consumer and the Checking Account Fairness (CCAF) Act Near the end of 2004, the Check Clearing for the 21st Century Act (Check 21) went into effect, bringing with it fuse opinions on what consumers and bankers alike could count. The now law dealt with the exchange of digitized checks opposed to physical checks, and decreased processing time drastically. The belief among many circles was that checks would begin to bounce en masse, and that the consumer would be impacted in a drastic way. This paper touches on the underlying subject of the float as well as subsequent rule entitled the Consumer Checking Account Fairness Act (CCAF) that addresses imperfections in Check 21. We will offer information on both acts and show how we as the consumer can expect to be affected. The FloatVentureline.com defines the term float as being the time among the deposit of checks in a bank and when the amount is truly sociable (2005). This term, although unfamiliar to some, represents a time honor ed practice that virtually everyone, of any age, has become familiar with. With respect to our personal finances, a float is used to spoil the consumer time forward funds must be withdrawn from an account. It is advantageous to use from the standpoint of cash flow, as funds might not be available immediately to cover a check, but are expected. This gives the consumer a small amount of leeway in writing checks, as the float may afford the consumer several days before they must cover a check. In a business setting, things are a bit different. There are still advantages that can be realized from a cash flow standpoint, however the float is more of a tool than a resource for the business, and bodied use of the float has revolved more around profit than prevention. In every business, or household for that matter, there will always be twain separate balances for cash. The first refers to the actual recorded amount on the corporate books, while the second is represented by the balanc e that the bank shows. The difference between these figures, or the float, means that a business can take advantage of short term cash to use for other means. For example, if a company writes $1,000 deserving of checks to vendors and receives $1,000 from customers, there would be no difference in what the ... ...ve known it, is on life support. Check 21 may not have been designed for the consumption of eliminating float time, but it most certainly has achieved this as a by-product. It remains a mystery as to how much longer it will be before banks are able to spend the money to fully integrate with what has come to be known as IRDs, or image replacement documents. So in the meantime, depending upon whom you bank with, or the size of the check you write, may dictate whether or not your documents are electronically sent. One thing that is certain, the advantage has now swung in the direction of the banking center, and only time will tell whether or not there will be relief under CC AF.ReferencesBankston, Karen, Still Got Float, Credit wedding Management Jan2005Sisk, Michael, Its Time for a Reality Check on Check 21, Bank TechnologyNews Jan2005Retrieved Apr 25, 2005 from www.ventureline.com/glossarySchneider, Ivan, Cut the Fee or detention and See?, Bank Systems & Technology,2005, CMP media LLC. Retrieved April 26, 2005 from www.banktech.comSchneider, Ivan, The Flap Over The Float, Bank Systems & Technology, 2005,CMP media LLC. Retrieved April 26, 2005 from www.banktech.com