Part 135 Check - Time Builders Beware!

[uscpilot]

Hey guys:
Read the law! Don't rely on company websites. Read the actual letter of the LAW. It is a law after all. And by the way, banks are REQUIRED to comply by October 24, 2004. Read the actual letter of the LAW It is not voluntary. Bank Of America will be 100% electronic by June 01.

The Fed is given the authority of implimenting the law. They also have the ability to issue regulations regarding the facilitation of the law. So quoting facts from the Feds website is not inaccurate.

And if banks cannot comply by oct 24 then what? Are they going to be fined, have there operations suspended, or maybe have all their assets deleted. From what I have heard there is not a bank in the country that will be able to comply %100 by the end of the year. This is my interpritation of the law, please tell me how I am wrong.
usc
PS I am not trying to incite a full blown argument. These issues are very important to me as it has quite an impact on my family's livelyhood. If your intentions are truely altruistic then please enlighten us. However, if you are just trying to scare those of us still in the industry, please stop.

 

[jtharth]

Capndan is a good guy, he is not trying to scare anyone, he just doesnt believe that we will be in the check flying business in 9 months. he is very knowledgeable on the subject as he deals with the banks EVERY day.

If what he says is true and all banking will be done electronicly, does that mean that we are out of a job in a few months??? NO! i hual work that is 95 % mail and 5% checks. i know that the 5% checks pay for the flight but are banks willing to wait an extra day to get that mail? incidentally, my company has ADDED two bank runs in the past week... we are expanding not shrinking. i think that canptndan is too pessimistic on the subject. there is no reason to think that we will be around much longer, but the timeline that he insists is in place will not come about. think of it this way...

there is a concealed weapons law in the state of florida. that means that someone CAN carry a gun on their person if they are lisenced. does this mean that EVERY person in florida must now carry a gun just because there is a LAW?? i have read the law and i disagree with capn dan.

 

[starcheck1]

Getting off the supject here, has anyone read the latest AOPA article about Radio Communications? There was a part about Call signs. Well the article mentioned AirNet (AKA U.S. Check).. the paragraph went something like this... "Wonder what they'll do when the check flying goes away.. will they start calling themselves U.S. Debt." I couldnt believe the paragraph when i read it, had to read it a couple of times.. but it seems like everyones targeted us as doomed! Check out the Article.. its in the AOPA issue with the TBM-700 on it.

In the article they say U.S. Debit ....as in now everyone uses debit cards I believe...still not a compliment though.

 

[uscpilot]

Capndan is a good guy, he is not trying to scare anyone, he just doesnt believe that we will be in the check flying business in 9 months. he is very knowledgeable on the subject as he deals with the banks EVERY day.

If what he says is true and all banking will be done electronicly, does that mean that we are out of a job in a few months??? NO! i hual work that is 95 % mail and 5% checks. i know that the 5% checks pay for the flight but are banks willing to wait an extra day to get that mail? incidentally, my company has ADDED two bank runs in the past week... we are expanding not shrinking. i think that canptndan is too pessimistic on the subject.

The capt may be a good guy. However he is being very selective in his reading and interpriting of the law. I do agree with him on how to regard what our employeers say with a great amount of skepticism. Check21 will be good for the company as a whole, but not in the long run for check haulers. I think it does spell the end, but it is not 8 months away. It is not the 3-4 years that I have heard others say. My guess is some where in the middle.

I would not bet too much on the mail sustaining our routes. They arent having to pay much if any extra to move the mail with us so they just throw it on (I know I should not generalize, there are exceptions, this is how it is in my micrcosim).

I did not mean to sound like I am hiding in a corner quaking in my boots as my post scrip might have implied. I meerly wanted to get across that spreading unfounded rumor as if were the truth does not help the discoarse.

usc

 

[capndan]

I think most of you are missing the point.

This point is this:

What, according to the law, is the definition of non-compliance?
It is the banks' inability to facilitate electronic transferring of checks due to software/hardware issues.

All banks must comply with Check-21 by late October. Does that mean if they don't have software/hardware to comply that they will continue to fly the checks? NO!
It means these banks will be forced to ISSUE "Substitute Checks" to their customers who demand to see a paper receipt of their check. The "Substitute Check" is a legal document issued/printed from the local bank in question.
Again, the "Substitute Check" provision in the new law is the PIVOTAL point.

Let there be no mistake: All the major players in the banking industry (and you know who they are) are aggressively re-tooling to comply with Check-21 by late October. In many cases, their timeline is much sooner.

These "major players" are also going to be doing "correspondent processing" for the minor players.

Check-21 was signed into LAW to save the banking industry many BILLIONS per year in transportation costs. BILLIONS.

Look at the bigger picture...why wouldn't the banking system adopt Check-21 as quickly as possible to be able to get in on the transportation-savings bonanza?

Yes my friends...check-flying is going to come to an end. Bank mail, loan documents, etc. may continue for a while. Bad news is that most Part 135 check-haulers can probably only sustain themselves to perhaps 20% of what they are today once the check-flying ends.

And it will end....by November.

Be smart...plan for it.

 

[uscpilot]

Captn
I still dont agree with you on how quickly this will be implimented. From what I have been told the majority of banks do not have the ability to issue substitute checks. The economic and political fallout that would result is enough to keep the Fed from implimenting the new law too quickly.
If it does happen as soon as you say I dont think it will be the end for some of the larger 135's. There will be some down sizing no doubt. My reasons for saying this have to do with the fact that my company has invested millions in its aircraft (buying new Caravans, updating the barons, and getting the lears RVSM compliant), and is in the process of building a new sorting/company HQ.
The savings that you are siting are not there. I dont have the data infront of me, but the cost of electronic transfer is still more expensive than physically hauling the checks.
At any rate the end is near, though not this year, and I am planning for it.
usc

 

[capndan]

I dont have the data infront of me, but the cost of electronic transfer is still more expensive than physically hauling the checks.
At any rate the end is near, though not this year, and I am planning for it.
usc

You can't be serious, right?

I mean...which is more expensive: driving your resume to your next employer? Or, faxing your resume to your next employer?

 

[uscpilot]

You can't be serious, right?

I mean...which is more expensive: driving your resume to your next employer? Or, faxing your resume to your next employer?

It is the cost involved in implimenting the technology, not the actual act of pressing a button to send funds.
usc

 

[upndsky]

There was a good article about this in the Wall Street Journal a few months back. According to the article, it costs a bank on average 7-9 cents to fly a check vs. 11-12 cents to electronically process it. So a bank may send a subsitute check (ie. a scan), but in the short haul, it may still be cheaper to fly and send the real thing.

Also, your analogy about faxing a resume is flawed. You are talking about only one item. But multiply that by 10,000 or a 100,000 (the number of checks one plane may carry), and you'd have one heck of a phone bill.

What you will see happening is that the time-critical nature of check hauling will go away. Instead of having many planes carry a little bit in order to meet a deadline, you'll have fewer planes carry larger bulks. The check may be processed electronically, but the physical item still has to be handled in some form or fashion, at least for now.

And again, Check 21 only dictates how banks deal with the Federal Reserve, not how they handle checks inhous, and where I work, that's the bulk of our business.

 

[uscpilot]

Also, your analogy about faxing a resume is flawed. You are talking about only one item. But multiply that by 10,000 or a 100,000 (the number of checks one plane may carry), and you'd have one heck of a phone bill.

Also the cost of buying the fax machine or computer vurses driving it to the employeer is much higher. This is why the electronic transfer will initally cost so much. Eventually as the technology becomes cheaper (like DVD players) more banks will use it.
You are also correct about the inhouse work, which is what I carry, it will be around for a while.
usc

 

[Tram]

Still plenty of time to build time flying checks. But check flying will come to an end by November of this year.


Meanwhile, guys and gals...by all means get out there and build time! I did it for several years and you can too...(until Nov).

Looks like they have less than a month left, eh?

 

[GravityHater]

What is the penalty for dragging old threads out of our forbidden past? Isn't it something like 1 day in the slammer for every month the original post is aged?!

 

[Tram]

Wow, I just realized how old this thread is.. I thought it was atleast from 2005..