A Man Walks into a Bank

Most systems today are completely automated, they'll check that the routing number is valid but not the account number the check is drawn on. Routing numbers don't change, but hundreds of thousands of account numbers are created every day throughout the US.. banks are different on how they do their internal account numbers, different algorithms are used when generating these account numbers. I work for a relatively small bank and on a normal day we'll clear 100,000 checks.

With the changes put in place after 9/11 and the Check 21 legislation float has diminished quite a bit but it still exists. Unfortunately there's just so much blue tape that banks are required to jump through that money that is fraudulently acquired takes some time to get back.

the reason this even happened is he was a good standing customer, and they did have his account information so of course they let him deposit it. it would be the responsibility of the bank that the check was drawn off of to catch the mistake. The man's bank just issues a credit to the bank that is drawn on.. it's when that bank catches the error they have to send off for a correction, this normally takes quite a bit of time.. we're talking 2-3 weeks especially in 1995.

the minute the man withdrew the cash their internal system red flags such a large withdrawal amount, this is why the bank was suddenly made aware of that transaction.

In other words, banks use lazy evaluation to validate checks.

Pretty hard to believe a check that size held up a bank merger.

I live in continental Europe, can someone please explain the American cheque system to me? Is it still widely used?

We have giro and SEPA transfers. If I want to transfer money to someone, I simply order my bank to withdraw said amount from my account and transfer it to the destination account. I could even do this without having a banking account. Anybody could walk to a post office or bank and pay into someone's bank account with cash on hand.

Because there's persistent demand for it -- from a public that is evidently outraged at the longstanding behavior of banks and the fact that virtually no high-ranking bank executives have paid for it.