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On December 17, 2001, Federal Reserve Chairman Allen Greenspan sent the Check Truncation Act to the US House and Senate. As his cover letter stated: "The proposed Check Truncation Act is designed to foster payment system innovation and enhance the efficiency of the payments system by reducing some of the legal impediments to check truncation that exist under current law". The Act was finally passed in 2003 and signed by President Bush on October 28. It took effect on October 28 2004. At that time, banks could send images instead of checks to banks who will accept them, and send Image Replacement Documents to the others.
The ANSI X9.37 Standard has been revised, and defines the operational details for electronic presentment. MICR Automation is a member of the X9 Committee, and has followed the development and details of this new standard closely.
The MICR Automation System fully supports electronic presentment and acceptance. Incoming presentments are treated just like incoming cash letter bundles. The system creates a run for them just as if they had been run through a sorter. Operators can then hotkey up the images and other supporting details for each item from the MICR line screen.
When the data is sent to the host system, electronically presented items are included just as if they were actual checks, complete with any special trancode(s) that users want to apply. There is no need to make any changes to the core processing system.
On the presentment side, the MICR Automation System provides for sending image presentment endpoint items to a separate pocket, and then automatically prepares image presentment files for these endpoints.
The so-called Second Day handling is fully supported. MICR Automation Image Based Exception Item Handling intercepts the Exception Item File and allows the transaction images in accounts with bad items to be reviewed instead of the paper documents. It then rewrites the Exception Item File to pull only the items being physically returned, and prepares electronic return item bundles for the items presented electronically.
MICR Automation users can move incrementally. As more and more endpoints announce that they will accept image presentments, users can stop manually handling more and more items.
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