House Banking Committee Chairman Jim Leach said Friday that banks should not be given an extra day to clear local checks.
Rejecting a request from the Federal Reserve Board, Rep. Leach said there is "no compelling public argument" for allowing banks to hold checks longer.
The Federal Reserve, as part of its effort to fight check fraud, last fall asked Congress to let banks hold checks for three days.
"This concern for safety and soundness must be balanced against the costs to consumers," Rep. Leach said in a letter to Fed Chairman Alan Greenspan. "By holding to a two-day limit, Congress encourages the advancement of check-clearing technology while giving working families earlier access to their much-needed resources."