INSTANT DEPOSIT.

Byline: Joe Mosley The Register-Guard

Anew law, some straightforward technology and a bit of clever application of science is leading banks in Oregon and around the country down a new path that leaves the old paper trail of check-cashing far behind.

"This is, I think, one of the greatest pieces of technology we've seen in some time," says Mike McEntee, manager of commercial banking for the greater Oregon region of Wells Fargo Bank.

Imagine a bank customer stepping up to an ATM, feeding a combination of cash and checks into a deposit slot - with no envelope - and receiving a receipt that details each part of the transaction and credits her account immediately.

Or think about a business owner taking the day's proceeds into his office, running all the checks through a special scanner and then setting them aside. The transfer of funds has been completed digitally over the Internet, greatly reducing a "float" that traditionally has amounted to a limbo period of up to a week for checks-in-transit.

"It was a great option for us," says Gary Danner, the chief financial officer for BowTech, the Eugene maker of hunting bows.

"We're located out by the airport, so it's not like there's a plethora of banks out here," Danner says. "It was taking me about an hour every day (to drive into town) to do the deposits."

BowTech signed on early this year to the iDeposit program with West Coast Bank, a Lake Oswego-based institution with a branch in Eugene. Businesses that take part in iDeposit - or similar programs at other banks, such as Desktop Deposit at Wells Fargo - are able to do much of their daily banking from their own offices.

"It really is as they say - like we have our own teller on-site," Danner says. "All we have to do is type in the dollar amount, scan (the checks) all in and type the `send' button."

Digital imaging technology is nothing new, and many banks have used it for in-house data storage operations for several years. But recent federal legislation created a uniform format in which to create "truncated" images of checks and established for the first time that such images are legal instruments for the transfer of money and storage of transaction data.

The ability to plug deposit scanners into their own computers makes the programs an easy conversion for banks' business customers, and the cross-compatible format allows banks to deal seamlessly with one another.

"It doesn't matter if you take a GE light bulb or a Sylvania light bulb," says John Baker, senior vice president for treasury management at West Coast. "They both fit into the socket."

The new law, passed by Congress in 2003, is the Check Clearing for the 21st Century Act - Check 21, to insiders. It authorized banks, beginning last October, to replace paper checks with digital copies and eliminate the cumbersome routing of paper checks by deposit pouch or armored vehicle.

"The cause of this whole legislation really was 9-11," says McEntee, of Wells Fargo. "When they shut all the airlines down, there was no way to transport all the checks from the Federal Reserve (Banks). This was passed to come up with a better system to clear checks in a major event - essentially, trying to reduce the overall transportation of paper."

Whatever the impetus, the law change is resulting in a wave of new services at banks around the country.

No-envelope ATMs are springing from the same technology and legal authority as the deposit scanners for businesses. Images of all checks deposited in such ATMs will show up on the customers' receipts, and digital copies will be stored by the banks as records of the transactions.

Wells Fargo is operating about 50 of the new-generation ATMs in Northern California, and Bank of America - with 20 ATMs in the Charlotte, N.C., area - is among the other banks around the country that are experimenting with digital transfer technology.

Betty Riess, a Bank of America spokeswoman in San Francisco, says the new ATMs are expected to speed up check processing and reassure customers.

"I'd say it saves time for the customer and it gives them that immediate verification," Riess says. "It increases their comfort level with making deposits at ATMs."

The next high-visibility application of the same Check 21 technology will likely be scanners placed at the cash registers of retail businesses. A customer will write a check to pay for a purchase, then the check will be scanned into the merchant's computerized cash register system and handed back to the customer - making such a transaction the rough equivalent of a debit card purchase.

And already there are spin-off services - such as checks from a Florida-based company that will be preprinted with a "signature code" derived from the bearer's own signature.

As a check is scanned and converted to a digital image, a special reader will determine if the check-writer's handwriting matches the signature code.

""I think all of this is designed to eventually eliminate the burdensome processing of paper," says McEntee, of Wells Fargo. "We're trying to help our customers become more efficient in all their backroom operations, and to convert to more electronic applications."

And so far, the response from customers seems to justify the efforts of the various banks that are leading the way into Check 21 technology.

Wells Fargo has set up about a dozen business customers in the Oregon region with Desktop Deposit, with another 25 or 30 in the process of joining the program. There is no fee for using Desktop Deposit, other than the cost of the scanner - typically $500 to $600.

The bank is recommending the service to businesses ranging in size from about $15 million to more than $100 million in annual sales, McEntee says.

At West Coast Bank, the technology is much more broad-based. Various sizes of business customers are joining the ranks of iDeposit - for now, the scanners are being installed for free, but users must pay monthly, volume-based fees starting at about $50.

"We rolled it out in the middle of December and it's working extremely well, so we decided to go full-bore with it," says Baker, at West Coast. "As of today, we have 222 customers using the system.

"We thought it was important to be able to offer the product to even the smaller customers," he says. "There are not that many Nikes or Intels."

The beauty of the program is its simplicity, Baker says. Installation takes as little as five minutes - essentially, plugging a scanner into the USB port of a customer's computer - and the system then runs through a secure Internet site.

"You scan in a check and it creates a file, and essentially puts that check into the check-processing stream, without (the paper check) having to go to a bank," Baker says.

"We bankers, we love new stuff. But our customers are saying, 'Hey, you don't have to talk us to death. We get it.' "

At Bow Tech, Danner says the system has saved his business both time and money. It has reduced banking trips into Eugene to once a week, and gets customer checks deposited more quickly into the company account.

"Even if we were closer to the bank, I still would have opted for this - just for the convenience," Danner says. "It's great technology."

CAPTION(S):

Checks are scanned and the amounts are entered into a Web site for depositing.