Six banks are joining a national check clearing house set up by Huntington Bancshares Inc. to bypass the Fed and other bank settlement systems.
Barnett Bank of South Florida; Comerica Inc.'s lead bank; First American National Bank; First National Bank of Maryland, a unit of Allied Irish Banks PLC; the lead bank of First Security Corp.; and Fleet National Bank have gone in with Huntington. The seven plan to exchange checks on a production basis by the first week in October.
Cost Savings Target
Huntington designed the check clearing house, called Chexs, with two partners, air courier U.S. Check and consultant Littlewood Shain & Co. The goal is to cut clearing costs for big check-processing banks by as much as $1 million a year.
This would be achieved by letting institutions exchange checks directly with other members in different Fed districts, instead of having to pay fees to the Fed. The clearing house also aims to reduce or drop many fees banks pay each other.
Chexs plans to charge 0.35 cent per check, instead of the 1.1 to 2.9 cents the Fed charges.
First National Bank of Maryland and First American are testing the system with Huntington. Fleet plans to begin testing next week.