Farewell to the float.

Byline: The Register-Guard

Another cherished American tradition is headed for the boneyard, taking its place alongside vinyl records and vacuum tubes. Consumers need to pay close attention to this technological transition, or they'll pay dearly.

Say goodbye to "check float," that unofficial grace period that exists in the twilight zone between the act of writing a personal check and having it physically returned from wherever it was sent to be cashed by your bank. Millions of Americans have taken advantage of the float to make purchases or pay bills before actually depositing the money to cover their checks.

Say hello to Check 21, the hip nickname for the Check Clearing for the 21st Century Act, which went into effect on Oct. 28. Check 21 will transform check processing by allowing banks or companies receiving checks to turn paper checks into electronic images that can be sent across the country at the speed of e-mail.

Zap! There goes the float, particularly for out-of-town checks that used to have a minimum two- to three-day float, not counting time spent in the mail. Check 21 will cut that to 24 hours if a bank uses electronic processing.

Consumers who aren't paying attention will begin paying stiff fees to banks for bouncing checks.

The New York Times estimated that Check 21 could shock unsuspecting consumers with news that they're bouncing 7 million more checks a month, for which banks will rake in an additional $170 mil- lion in monthly insufficient-funds check fees.

In addition to the bounced-check windfall, banks will save billions in paper processing costs.

Consumers will get hit coming and going, because just as the banks dramatically speed up check processing, they'll continue to place holds on deposited checks before making funds available.

That creates the very real possibility that consumers could deposit nonlocal checks, which banks are allowed to hold up to five days, and be charged insufficient-funds fees for rapidly processed electronic checks that the deposit was intended to cover.

Check 21's lack of consumer protection has sparked strong complaints from Consumers Union and the Consumer Federation of Amer- ica.

Banking industry officials claim the concerns are overblown because banks already hold most deposits for shorter periods of time than the law allows.

Despite predictable confusion, the burden of understanding how Check 21 works falls squarely on consumers. They need to get in touch with their banks and credit unions about the implications of Check 21 and the rules for deposit holds.

Fortunately, consumers have some clout, even under current rules.

Competition in the financial services sector offers consumers opportunities to take their business elsewhere if they're unhappy with a particular bank's policies.