The National Clearing House Association has developed software that uses images to make check adjustments, such as correcting the dollar amount, even for checks that are cleared as paper.
Image-clearing systems have been designed to handle adjustments electronically. However, if a bank receives a check as a paper document, it has to revert to the traditional adjustment process - faxing a copy of the check and other supporting documents to the bank of first deposit.
"In the image world, all they do is to attach the image and it goes back and forth," said Tom D'Aquisto, a co-general manager of the NCHA.
The software, which has been integrated into the NCHA's settlement system, lets a paying bank's operations staff correct any entry electronically.
If the check arrived as a paper document, the software generates a fax cover sheet containing a bar code for the paying bank. When the bank faxes the check to the NCHA, its fax server converts the check and supporting documentation into electronic form and forwards it to the receiving bank, where it is immediately available for viewing online. Glenn Wheeler, the NCHA's other co-general manager, said the adjustment software is "designed to encompass all the NCHA exchanges."
Six institutions tested the software for two months, and it went live for all of the NCHA's participants last week, Mr. Wheeler said.
The Dallas organization is one of the largest providers of settlement services for image exchange systems. It serves 3,000 small institutions that use the Endpoint Exchange network and nine large and midsize ones that use Viewpointe Archive Services LLC of Charlotte for image sharing and exchange.
The NCHA also settles paper and image check payments for 20 local and regional exchanges.
Some institutions must fax adjustments to the bank of first deposit up to five times to get an adjustment processed, he said; delays can occur when a fax is lost or ends up in the wrong department.
By running the adjustment items through the clearing house, "It takes away 'I didn't get it,' " as an excuse for delays, Mr. Wheeler said.
