NEW YORK, March 9 — "Scenic" or "fancy" checks can cause serious operational problems in "a slow-up of the through-put of checks in the banking system" unless precautions are taken in designing them, a banking industry task force investigation shows.
Such bright-colored specialty checks with pictures on them — running the gamut from pastoral scenes to psychedelic swirls — have been adopted by an increasing number of banks across the country.
And, as one member of the task force observed, "if ever there was a case where marketing and operations didn't communicate, it was with these checks."
In October 1969, the investigating committee began looking into potential problem areas with such checks — both in terms of man-readability and machine-processability.
Headed by C. Bickford Henchey, American Bankers Association director of standards, and including bank marketing and operations officers, as well as representative from bank printers, equipment suppliers and the Federal Reserve System, the task force ran tests on various types of the new picture checks and asked several banks that have been using them to do the same.
Most checks that the group tested or reviewed met ABA check standards. But, some had designs that created serious problems, primarily in terms of human readability.
"Essential areas of the checks could not be read by the human eye because of obscuring design features," the study group reported.
The problematic checks reviewed by the task force indicate simply a lack of common sense in designing them. "Dark green grass over a signature panel" or "heavy purple mountains over the amount column" obviously are difficult to read.
Raymond C. Kolb, senior vice president, Mellon National Bank & Trust Co., Pittsburgh, and chairman of the ABA automation subcommittee on standards, has prepared a letter, detailing the findings of the task force, which will be sent — within the next two weeks — to the chief executive officer of every commercial bank in the country.
Mr. Kolb emphasizes that the task force "found no reason for suggesting elimination of the use of scenic or fancy checks at this time."
"It did find, however, that unless certain caveats are observed in designing scenic checks, serious operational problems are presented which could result in a slow-up of the through-put of checks in the banking system, and an increase in errors and losses for both banks and bank customers," he added.
Moreover, Mr. Kolb charged "in these days of ever increasing check volumes and processing costs, such a result would be intolerable."
In the letter, Mr. Kolb pointed out that the "caveats" concern design considerations already covered by standards in check design, developed by the ABA, and described in ABA documents: 147R3, "The Common Machine Language," and Bulletin 150, "Check Standards."
The task force recommended that these documents be studied and followed in designing scenic or other checks.
The design problems are not such as to inhibit "attractively designed scenic or fancy checks," he stated.
"However," Mr. Kolb asserted, "it must be remembered that checks are operational documents and negotiable instruments. Checks must be read by human beings. The date, written amount, number amount, signature, and magnetic ink encoding area, in addition to other essential information, must be clearly readable by bank personnel, the customer, merchants, and other businesses. And, they must be readable whether typed or written in various colored inks."
Moreover, banks were cautioned that — since checks normally are microfilmed — check designs should be tested for microfilming quality, as well as human readability.
