Check Representment
Categories: Banking, Regulations, Econ
You made a bet with a bookie. But you didn’t pay him off by the end of the week. So the bookie sends Bruno over to sit outside your house and wait for you to come home. He might wait a few days while you gather the money. And if you don’t pay him, your knees might be a wee bit broken.
Banks in the Federal Reserve system aren’t as harsh. If you make a payment with a physical check, and the check bounces, a bank has the ability to resubmit that check over and over again until that check clears. This is known as Check Representment.
With this service, a bank transfers the physical check into an electric file for the purposing of resubmitting it until it clears. Which is a much better system than what Bruno offers.
