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Why is my bank bouncing my checks?

Ever notice how checks clear faster than they used to? The banking industry's move to speed electronic clearing is catching on, but has left some consumers with more bounced checks.
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Ever notice how your checks seem to clear faster than they used to? The banking industry's move to speed electronic clearing is catching on so fast, the Federal Reserve last week announced it only needs half as many check processing centers as it did three years ago. But the move has also left some consumers, like Leon in Georgia, with more bounced checks.

I bank online with Bank of America. I deposited a check which was posted to my account. The bank started returning my checks, saying the deposit was on hold. This was told to me 3 days after the check was posted in my online statement. Now the bank has charged me with more than $400 in fees. The deposit was never shown as pending or on hold. Is there any way I can get my money returned, or has the bank ripped me off?
-- Leon W., Powder Springs, Georgia

Is what the bank did illegal? Probably not. Is $400 in overdraft fees outrageous? We’d say so. But you’re not alone.

Starting about a year-and-a-half ago, new regulations took effect that were designed to make checks clear more quickly. In the past, paper checks had to be physically delivered from one bank to the next — making stops at processing centers along the way — before the funds cleared. This blizzard of paper is now giving way to electronic transfers that has cut the time it takes to process your checks. In 2003, the Fed maintained 45 check-processing centers to handle the flow; after cutbacks announced last week, the Fed says it will only need 18 centers.

That's because the law now lets banks scan checks and zip them where they need to go. A process that used take days can now take just hours. But when the rules were changed governing how long it takes your checks to clear, a separate set of rules on how long banks can put your deposit on hold haven’t kept up. To make matters worse, not all deposits take the same time to clear.

For details, we went on the Bank of America Web site and chatted with one their representatives:

MSNBC.COM: How long does it take for funds to be available from a check deposited to a BoA checking account?
BoA: Now that check would be available the next business day.
MSNBC.COM: Under what circumstances would there be a hold on the funds?
BoA: If it was an out of state check.
MSNBC.COM: Then how long would it take to make those funds available?
BoA: It really depends on a lot of different things. You will need to go to a banking center to find out how long a check will take to clear.

So we gave Bank of America’s customer service line a call. It turns out that out-of state checks can still take up to five days to clear. (In-state checks normally take about two business days. Federal checks should be available the next business day, according to the customer service representative.)

It turns out that, under something called the Expedited Funds Availability Act, your deposit may clear on the same day — or take up to 11 days if certain extraordinary circumstances apply, according to a spokeswoman at the Federal Reserve. (For details, check out the Fed's Web site.) The guidelines on deposit hold times is under review and a report is due next April.

But it's up to each bank to decide how much to charge for overdrafts. And if you bounce a check at Bank of America, you'll get hit you pretty hard. On any given day, the first two overdrafts will cost you $19 each; the third and fourth $33 each and each check over that will cost $35 each, according to a customer service rep. So if you deposit an out-of-state check and then immediately try to pay your bills, those overdraft fees will add up. Still, you’d have to bounce 13 checks in one day to rack up $400, under the fee schedule the bank provided.

And even if you did write a whole lot of checks against that deposit, $400 is a little excessive. So give customer service a call, ask to speak to a supervisor and then ask them to explain exactly what you’re being charged for. If you don’t get anywhere, tell them you’re shopping for a new bank. We’ve found that banks and credit card companies will often remove late penalties, transfer fees and other seemingly endless charges  — “as a special courtesy”  — to customers who call up and squawk.

In your opinion, will Enron ever get back on its feet? I have over 1,000 shares that I did not sell. Not ready to cash in as of yet.
-- Michael, Deerfield Beach, Fla.

We don't usually comment on the outlook for individual stocks, but we'll go out on a limb on this one. Even if parts of the company once known as Enron live on, chances are little to none that any surviving business would use that name. In any case, if you owned the shares before November 17, 2004, you can’t cash them in. They’re worthless.

That was the date Enron entered bankruptcy proceedings, at which point the company's shares were “canceled.” In return — as with any bankruptcy — shareholders are assigned a portion of any of the proceeds left over after the company pays off all its bills and other debts — including bond holders, who are always in line ahead of shareholders in a bankruptcy.

In Enron’s case, the company says it is “very unlikely” there will be anything left over for shareholders. (For more on the subject, check out , which at this writing is still standing.)

But before you use those Enron shares to wallpaper the bathroom, keep an eye on a civil suit scheduled to get underway in October. If you bought or acquired stock in Enron or Enron-related companies between September 9, 1997 and December 2, 2001, you’re part of the class action lawsuit that's trying to get back money lost by investors, according lead attorneys for the case.

And there's a good chance there will be at lease some money to go around. Those lawyers have already reached a settlement with three of the banks that helped set up the financial shuffle that brought Enron down. Last month, those banks ponied up $6.6 billion to settle shareholder claims against them. Another $500 million had already been paid by banks and Enron directors. Other banks have yet to settle.

For more on the lawsuit, and details on how the money will be distributed, check out the set up by the lead attorneys for shareholders.