Bad News Should Travel Fast: Hot Checks, Tardy Banks, and the Uniform Commercial Code’s Rude Surprise

Introduction

Each day the check collection system processes approximately 17 million checks, many of which are payable to consumers’ who trustingly deposit them in their bank accounts and soon spend the deposited funds on goods and services, necessities, and luxuries. From a consumer’s perspective, the check collection system usually works well. Indeed, less than one percent of checks are dishonored. In absolute numbers, however, dishonored checks exceed one million daily.

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