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Financial Conversations with Fitz #76 - How can that check be back so soon! - 08/10/2010

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Corn and beans are growing. 1860 degree days. About 39 behind last year. Over half way there…... Dow will probably open strong this morning….Earnings are improving—Grain, what a ride it has been….Last week I mentioned, Don’t let these increases go without some action. Than the market jumps some more. So much for listening to the bankers predictions. Market will probably open a bit higher today. Traders go from flood to drought in two days. Worried about our high temperatures.. Lots of corn out there at least in northern Iowa and southern Minnesota…..If you do any traveling it looks like a greenhouse both east, west and north from here except for the ponds. This is the month to definitely empty the bins. Regionally most of the grain is in town. Don’t wait too long that the elevators won’t be able to take your corn when you want to deliver it.

I had a call last week on this…..How can my check be in my account today? I just wrote it. There are probably two good reasons why this happens. Have you gotten used to the store handing your check back to you? This is happening more often than not. Even if you mail your check the companies are starting to process them electronically. The Electronic Payments Assocaition estimates that more than 1.7 billion paper checks were converted through in-store and mail in transactions. So how does this happen. When the check is handed back to you take a good look at it. The money went from your account to the merchant at that time. A lot like a debit card. Notice that the check is now non negotiable. It does show up in your statement with good description. Now the check itself will not be in the bank statement because it is in your hand. That is why it is important to keep the receipt. Your company has to let you know that they are using electronic transfer. If they are doing it with a mailed check they will have let you know on your statement somewhere or in one of those half dozen slips of paper in your last statement. Even if you are not part of an electronic payment your check moves thru the system much quicker than it used to. The banking world is down to one central system for processing checks instead of the 12 banking districts we used to have. That is why it is so important to make arrangements when you write that large check. The days of FLOAT are gone. Most of the vendors have gone to some type of transfer this way. I know IRS, FSA and some suppliers are switched. That is why it is so important to review your statement much sooner and more through than we ever used to. Be sure you review the exact amount and time of the withdrawal. Some banks even have it listed in a separate place on your statement. Be sure your check was only processed the one time. Be extra careful with telephone or online transactions. Don’t do this process if you did not initiate the transactions. Be comfortable with the company your are working with. You are giving them a lot of personal information. Sometimes we think that is a radical change for us, but I remember my mom ordering all of our clothing in the Penneys or Sears catalog with a check that she sent. It just moves a lot faster. If you want to read more about this just go to www.ftc.gov. Scan the page for consumer information. Stop in at our offices to double check with our bankers to review your statement for how an ‘electronic payment’ looks like.

Remember that you should deal with people in community banks and organizations that when they put something together for you that they will be sitting with them at ball games, church or community events. So, if in doubt give us a call.