Nation/World
Friday, Jan. 24, 1986
University Daily Kansan
11
Bill OK'd to force check releases
United Press International
WASHINGTON — The House, responding to horror stories about banks holding checks, checks, Treasury checks, for weeks, voted last night to require banks to release customers' funds promptly after deposits are made.
A bill to speed the release of depositors' funds was approved on a 282-11 vote and sent to the Senate. The measure was strongly supported by consumer and public interest groups. It was opposed by the banking industry.
Backers argued that banks do not need to hold onto deposited checks for long periods of time since 99 percent of all checks were honored. Of all returned checks, 60 percent are paid on the second try, they said.
The House approved an amendment to allow banks to hold checks if they suspect fraud or if the check was from a company going through bankruptcy.
Opponents of the bill said it would make fraud more difficult to prevent, and as a result banking costs would increase.
Rep. Fernand St. Germain, D-R.I., chairman of the House Banking Committee, described the current checkholding policy as outlandish and said it caused hardships for people who needed ready access to the money they deposit.
"In all too many cases, they don't have access to the money they have earned," he said. "It is tied up by banking policies that say the customer has to wait days and days and sometimes weeks and weeks before the bank says the money is available."
Bank customers often are hit with fees for returned checks they have written on the assumption their deposits had been credited by their bank. St. Germain said.
He cited cases in which banks even put holds on tax refund checks from the Treasury.
"My heart can't bleed for an industry that makes $290 million a year in check float by holding onto money that is rightfully yours, not to mention $3.5 billion a year reaped from returned check fees," St. Germain said.
The bill would provide a three-year schedule to phase in the new requirements. During the first year, banks would have to make money available for withdrawn on the third day after deposit of a check drawn on another local bank. During the second and third years, the money would have to be available on the second day after deposit.
After the third year, money deposited by checks from local and in-state banks would have to be available the following day.
government checks and cashiers checks.
Next-day availability would be required 90 days after the bill's passage for all cash deposits, checks of $100 or less, Treasury checks, state and local
Rep. Stewart McKinney, R-Conn, said he was reluctant to push such a bill but banks have refused to change their policy.
"We have asked the banks over and over again to stop holding checks," he said. "We have waited for a good faith effort." But, he said, the situation had not changed.
Rep. Steve Bartlett, R-Texas, opposed the measure but conceded it was on a bandwagon for passage. He said the bill would increase consumer costs by vastly increasing the probability of fraud and check-kiting schemes.
Rep. Norman Shumway, R-Calif., said the bill should be amended to give the banks more flexibility in meeting the new requirements. The bill really places banks in a strait-jacket. It denies them any discretion, he said.
Police end Hormel strikers' blockade
United Press International
AUSTIN, Minn. — Striking meat-packers' attempt to stop non-union workers from entering the Geo. A. Hormel & Co. plant yesterday was thwarted when police bashed windows and yanked strikers from their ears, abruptly halting an auto blockade. Eight strikers were arrested.
Officers smashed the windows of two strikers' cars, pulled the drivers out and handcuffed them after they had locked themselves in their vehicles. Six other strikers surrendered without incident, as police stopped the effort to block the highway ramp leading to the plant. The police also impounded four
cars and reportedly drove two cars into ditches. National Guard troops at the plant entrance were not involved in the confrontation.
About 25 cars stopped on the ramp attempting to block non-union workers who were arriving for work at the plant's north gate, but police cleared the roadway within half an hour. No injuries were reported, police said.
"It's a tragedy and a mistake," said Jim Guyette, president of Local P-9 of the United Food and Commercial Workers.
Three meatpackers who were arrested appeared later with union officials at a news conference. Ray Rogers, a union strategist, called the arrests "an ugly incident." He
denied that the union had planned the blockade.
"We do not think it is the role of police to smash windows, to use physical force." he said.
Mayor Tom Kough, who is a striking union member, said, "I'm sorry these things happen."
Greg Bell, 27. "They grabbed me out of the car, threw me face first onto the cement, cut my face."
Union member Jerry Vlasaty said he and his wife were sitting in the car with the doors locked when state patrol officers smashed his car windows, pulled him and his wife out and drove their car into a ditch. Another meatpacker said his car also was run into a ditch after he was arrested.
The executive board of Local P-9
and a Hormel delegation including Vice President David Larson met with a fact-finder in St. Paul at the request of Gov. Rudy Perich in an effort to end the five-month strike by the 1,900 union meatpackers.
"It's a tough situation," he said. "It's gone beyond entrenchment."
The fact-finder, Arnold Zack, a Boston attorney, called the strike a unique situation and said he hoped both sides realized the need to be flexible.
Zack said he planned to take evidence from both parties, study the material and make a report with recommendations within 48 hours.
"I'm trying to narrow the issues," he said. "I'm here as an adviser and a suggestor."
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