Check/Check 21 Services

First Federal weathers Check 21's ripple effect on check adjustments

The movement from paper to electronic check processing, prompted by the passage of the Check Clearing for the 21st Century Act (Check 21), has created a ripple effect throughout the payments industry — from the way checks are processed and the types of errors that are created, to the way adjustments are submitted and the methods used to research and resolve adjustment requests.

The evolving electronic environment has enabled improved industrywide efficiency, as well as numerous challenges. Now that standards have been adopted and obstacles have been overcome in the check processing arena, the focus is shifting to check adjustments as more financial institutions seek further efficiencies provided by electronification.

The Federal Reserve Banks anticipate electronic check adjustments will undergo a transformation, too, as standard practices are implemented throughout the payments industry. “We will continue to take steps to address challenges faced by financial institutions in the electronic environment to help support more efficient and effective check adjustments processing going forward,” commented vice president Cynthia Rasche, in the Retail Payments Office at the Federal Reserve Bank of Atlanta.

By addressing the issues that cause adjustments and further automating case submission, research and resolution, we aim to improve the efficiencies of electronic check adjustments. Following are a few efforts that are currently underway.

Electronic adjustment services boost efficiency

Submitting adjustments electronically helps facilitate a quick and effective resolution to adjustments requests. The benefits of our Electronic Check Adjustments Services via the FedLine Web^® access solution include streamlined workflow processes and enhanced tracking features, making it the service of choice for adjustments processing.

First Federal Savings and Loan Association (Off-site Link), which was founded in 1882 and has three locations in Kewanee, Princeton and Geneseo, Illinois, recently converted to electronic adjustments. Despite the small number of adjustment cases it handles per month (less than 10), First Federal found moving to electronic adjustments to be fundamental to improving processing efficiencies and avoiding the fees associated with paper adjustments. More importantly, staff wanted to prepare for the future. “Eventually everything will be electronic, so we decided to get on board now,” indicated vice president of operations Jane Berlinski. ”We were already using FedLine^® for other applications, so it was a smooth process to add adjustments,” she continued.

Webinars help you stay current

Advances in electronic payments processing have resulted in changes to the types and mix of errors that are typically handled as adjustments, as well. We are tracking these changes and offering methods to assist you in processing adjustments in this new environment, not only to help increase efficiencies, but to also help minimize risk.

Our Check Adjustments Webinars are designed to help you stay current on all types of check adjustments so that you can quickly and effectively resolve settlement discrepancies on checks that were processed or handled by the Federal Reserve Banks.

Prior to moving off paper check adjustments, First Federal Savings and Loan staff attended several webinars and found them to be extremely valuable. “Having attended the webinars in advance of moving to electronic check adjustments, we knew what to expect during the transition,” Berlinski stated. “The webinars were beneficial in providing real-life examples, helping to make the transition very positive,” she continued.

The Check Adjustments Webinar topics (see listing below) range from the basics of forward collection, return item and Check 21 adjustments, to utilizing the FedLine Web Check Adjustments application and managing Documents to Follow (DTFs). In second quarter 2010, we will introduce a new webinar topic that covers endorsements, as well as requirements and options for handling Not Our Items (NOIs). Similar to the other webinars, this new session will help you maximize the benefits of our services through rich, interactive learning facilitated by knowledgeable Federal Reserve Bank staff. 

A free offering entitled, “What is a Webinar?” is also available to institutions interested in understanding the webinar experience and learning more about the topics covered in each of the sessions. Finally, customizable webinars are also available to institutions desiring training adapted to their specific training needs and interests.

New! Automated status report helps you keep track

Feedback shared by customers suggested a strong desire for regular updates on the status of outstanding adjustment requests. In response, we are pleased to announce the launch of the Check Adjustments Case Status Report, which will be available in May 2010.

This automated report, which will be available to Subscribers of the Check Adjustments application, will provide up-to-date information on the status of adjustment requests submitted to the Federal Reserve Banks. The report will help you track and follow-up on adjustment cases, which in turn will help you better manage financial risk. We hope you take advantage of this new feature to assist you in managing your adjustments efficiently.

Weathering the ripple effect

The ongoing migration to a fully electronic environment will continue to influence the payments industry for quite some time. Similar to the steps we are taking to enhance our check adjustment services, the Federal Reserve Banks will continue to address the challenges faced by financial institutions in this dynamic environment. Our goal is to help remove obstacles, while establishing standards and streamlining processes designed to move the industry forward.

To learn more about our electronic adjustments features, visit the Electronic Check Adjustments Online Resource Center.

Testimonials are reflective of individual experiences. All customers may not experience the same results.

The Federal Reserve Banks do not sponsor or endorse any of the non-Federal Reserve Bank-related products, parties or entities discussed in this publication.

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