🚀 go-pugleaf

In article <1991May9.183550.13233@millipore.com> blu@millipore.com (Brian Utterback) writes:
>In <12979@exodus.Eng.Sun.COM> eager@ringworld.Eng.Sun.COM writes:
>>
>>I believe that there is a Federal Reserve Bank requirement that all checks 
>>which are processed through the FRB
>>have MICR encoding.  This doesn't mean that your checks won't be valid, it 
>>only means that they will have take a long time to get to your bank.  If you
>>are collecting interest, maybe this isn't a bad idea :-).  At least until 
>>your bank starts to complain.
>>-- Mike Eager
>
>I am not a lawyer and I don't even play one on TV, but my understanding is that 
>they really can't complain.  Or rather they can't make you stop.  Your bank is
>required by law to surrender your money to whomever you designate when so 
>ordered by you in writing (i.e. a check.)   The form of the check is irrelevent.
[...remainder deleted...]

There have been many celebrated cases when checks have been written on cows,
eggs, concrete paving slabs...usually as protests.  While the bank is, in
theory, obliged to accept the "check", it charges for the special handling
that it takes to clear.  If you look carefully at the agreement you signed
when you opened your checking account (and you DID read it, didn't you? :-)
you will probably find that this is a *special* service for which fees can
be negotiated.

For ordinary checks to be processed through the various clearing houses, they
need the MICR with the bank, account and amount encoded, on a piece of paper
that will go through the sorting machines several times without tearing and
with the machine being able to read the electronic information each time.
Other checks are posted (or in the case of cows, I guess, taken) to the 
destination bank directly for clearing and this takes longer.

There was a comment about why do you have to endorse the back of the check 
in such a small place.  The answer is that the FRB, as part of the attempt to
speed up clearing (which means you get your money *sooner*) made some changes
to the system which mean that the banks need more of the check for the various
stamps they use to track its progress.

John Lister.