NEW FEDERAL LAW AFFECTS CHECK “GRACE PERIODS”
If you have ever relied on a “grace period” when you write a personal check, you
should be aware of a new federal law that now allows your checks to be “cashed”
on the spot.
Effective October 28, many Florida banks will begin an electronic check
conversion process known as Check 21. Check 21 is a federal law that allows for
the processing of personal checks in real time, which means funds can be
immediately accessed from your bank account.
Electronic check processing is not new to the financial industry but as more
banks use Check 21, those on fixed incomes who may have relied on a grace period
when paying bills could be impacted.
“Always make sure you have enough money in your account to cover the checks you
write at the time you write them,” said Tom Gallagher, Florida’s Chief Financial
Here’s how it works and what to expect: Instead of physically moving paper
checks, banks will process checks electronically. An image of the check, both
front and back will be sent instantly to the bank where the money will be
withdrawn. That means you may begin to receive a substitute check instead of
your original canceled check with your account statement.
Gallagher said Floridians can also tap
on managing monthly bills
logging on to
For more information about Check 21, check out the Federal Reserve Board’s
The skyline for October is Daytona Beach,
photo courtesy of the Daytona Beach Area Convention & Visitors Bureau.