Jewish World Review July 8, 2002 / 28 Tamuz, 5762
By Mark Kellner
http://www.NewsAndOpinion.com |
In the battle between innovation and choice vs. banking industry
leviathans, who's going to win? At this point, I don't know. But it
seems that customers who prize independence are almost certain to
lose.
VersaCheck 2002 Premium
Pro, an $80 software package that lets Windows users design and print
their own checks, using either a laser or ink-jet printer. The new
version of the program is very easy to use, offers a lot of nice
design features, and can help save money because you print only the
checks you need, cutting down on waste. The finished product can look
rather spiffy, if you ask me.
But following a recent review, e-mails came: two readers called my attention to a
little "love letter" they received from Chevy Chase Bank. Use checks
that aren't printed with magnetic ink on the "MICR" or "microcode"
line ? the string of numbers at the bottom of a check ? and Chevy
Chase Bank can slap a $1 charge on each check. This, by the way, is on
top of any other account fees, plus any interest Chevy Chase Bank
makes on the "float," or the investment of your funds in overnight
accounts between the time they're deposited and the time a check or
other debit hits your account.
Those customers who include a magnetic-ink "microcode" line on
their checks or who buy their checks through the bank, won't get hit
with the fee, because the checks can be "read" by Chevy Chase Bank
sorting machines.
A canvass of some other area and regional banks revealed that
some banks, such as Citibank, Bank of America, First Virginia Bank and
Riggs National Bank don't currently charge such fees.
The American Bankers Association also weighed in. Spokesman John
Hall said the ABA wants consumers to use only magnetic ink to print
checks because that's a "standard" to which all banks, and the Federal
Reserve, subscribe. Also, checks without magnetic ink can appear to be
fraudulent, requiring merchants and banks to do extra work in
processing a check. Mr. Hall also asserted that "all" banks use check
processing gear that relies on magnetic ink, and not the optical
character readers the software makers claim are employed.
A spokeswoman at the Federal Reserve Board of Governors in
Washington, who asked that her name not be used, said there was no
"legal requirement" that consumers print anything in magnetic ink on
their checks, however.
Where do consumers end up? If you have a Hewlett-Packard laser
printer, a brand that dominates the market, magnetic toner cartridges
are available for a price roughly double that of a regular cartridge.
If your laser printer isn't an HP (or a select model from Brother or
Okidata), you're out of luck, magnetically speaking, just as you are
if your printer is only an ink jet.
Within and around the banking industry ? off the record, of
course ? people will say several things. One, while there's no legal
requirement for magnetic printing, your bank may include such a
stipulation in its customer agreement. Second, the Chevy Chase Bank
gambit ? a $1 fee per item that's not magnetic ? might be the thin
edge of the wedge: if that bank's customers don't protest, then other
banks may follow suit. The nascent do-it-yourself check-printing
industry could face a big challenge.
Third, amazingly, few in the advocacy community or in Congress
seem interested in the issue. Along with that call from Riggs, I'm
waiting on either Sen. Paul S. Sarbanes' press secretary, or the one
from the Senate banking committee the Maryland Democrat now chairs, to
call. Gentlemen, the lines are open. (To his credit, U.S. Public
Interest Research Group official Ed Mierzwinski says his organization
will back consumer choice and keep an eye on the matter.)
Now what's really interesting in all this ? to me at least ? is
that the banks could make life easier for customers. Mr. Hall, the
ABA's spokesman, acknowledges the magnetic system is a 50-year-old
process. At the same time, automatic payments, Internet transfers,
debit/ATM cards and other methods are cutting the number of "physical"
checks being written by many of us. I can't remember the last time I
wrote a check for my car lease; the payments are made with a
Touch-Tone phone.
So, if banks were willing, they could upgrade processing systems
to optical-character-reading devices, give consumers a break and let
creativity flourish ? within reason, of course. It's not as much fun
as whacking folks a buck a throw, I'll concede, but it could soften
the "Old Man Potter" image today's otherwise-faceless banking
conglomerates often display to people who just want to save a few
pennies and are tired of discarding unused, out-of-date and
expensive-to-purchase checks.
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Beware: Consumers face a
fee for printing own checks