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Check your accounts

Business | New federal regulations will cut the amount of time consumers can "float" a check

Issue: "Bush's moral mandate," Nov. 13, 2004

Have you ever written a check without the funds in the bank to cover it? If you do it regularly, new federal regulations intended to speed up the processing of checks may cost you in the long run.

The Check Clearing for the 21st Century Act-or Check 21-allows financial institutions to exchange electronic images of consumers' checks rather than transporting the actual paper checks. That means checks that consumers write will have less "float" time between the time a check is written and when funds are actually withdrawn from the account.

Industry analysts estimate that it could take until the end of the decade for banks and credit unions to digitally process checks from start to finish because some major banks won't have fully implemented image-exchange processes until about 2008.

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Still, one consultant estimates that "consumers could be bouncing almost 7 million more checks and paying an additional $170 million in fees each month" because of the new regulations.

Ring it up

Cingular Wireless will become the nation's largest wireless telephone company since the Federal Communications Commission approved its $41 billion acquisition of AT&T Wireless last month. But how long will Cingular remain in the top spot?

That's the question industry analysts are asking as the company prepares to take on 22 million additional customers from troubled AT&T, which has been losing customers at a disturbingly high rate. In fact, both companies are among the worst when it comes to customer-service rankings and operating performance.

With 47.6 million subscribers, the new Cingular will have about 7 million more than Verizon Wireless, the current market leader. But nearly 4 percent of AT&T's customers left the company in the third quarter of this year, and more defections are likely. At the current rates, Verizon would surpass Cingular as the top provider in three years.

Balance sheet

• CNN plans to shut down its struggling CNNfn financial news network in mid-December, giving up its attempt to compete with CNBC after nine years.

• Northwest Airlines plans to recall about 600 flight attendants to "fill vacancies" in the Detroit and Twin Cities bases in December and January. More than 1,200 flight attendants are currently furloughed.

• Consumers, who substantially slowed down their spending in late summer, roared back to life in September, boosting their purchases by 0.6 percent.

• Volkswagen will shut down production at its Mexican plant for the month of November to reduce inventories and reconfigure the facility for new models. Nearly 10,000 assembly workers will receive paid time off-borrowed from 2005 vacation days-as a result of weak demand for Volkswagen models in the United States.

• After inching up earlier this year, mortgage rates are dropping again, spurring an increase in sales of both new and existing homes. Analysts believe that home sales for all of 2004 will set records.


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