News

Fed says its electronic imaging service proves popular

January 9, 2005

Business First of Columbus (Ohio): The Federal Reserve is reporting that more banks, including Cleveland-based KeyCorp, have signed up for its electronic imaging program to keep up with technology enhancements allowed under the Check 21 law.

The Check Clearing for the 21st Century Act, nicknamed Check 21, became effective Oct. 28 and allows banks to send digital images of checks, instead of the paper checks, to the banks where the checks were drawn. Under the law, banks that cannot accept electronic images are required to accept either a substitute check or printed replacement.

"(KeyCorp was) the first but there are numerous others using it now," said Fred Herr, senior vice president for retail payments for the Federal Reserve Bank of Atlanta.

Herr, who works from the Atlanta Fed's office in Birmingham, Ala., said he didn't anticipate as much interest in the product, known as FedForward, until the first quarter of 2005. "There has been a little greater participation than I had expected."

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