The eight banks that make up the Milwaukee Clearing House Association have shifted its daily check settlement operations to the National Clearing House Association.
The NCHA, which is based in Dallas, said Monday that it is now settling checks for 22 local or regional clearing houses.
The agreement with the Milwaukee group's banks demonstrates how a company that once served only southeast Texas has used the demand for electronic settlement to expand into a national organization that handles a large and growing share of the U.S. check volume.
Fred Redeker, the president and chief executive officer of the NCHA, said it provides settlement services to more than 300 members. Its volume grew 21% last year, to 6.7 trillion items, which the organization estimates at 19% of all checks written in the United States and 53% of those that the Federal Reserve banks do not handle.
Mr. Redeker said his organization grew out of the Clearing House of the Southwest. In 2000 it won a contract to provide national settlement services to 35 national banking companies through an Internet-based system that the Texas group had developed.
While some banks were developing electronic settlement systems that required participating banks to install software on their own computer systems the Texas group's platform was entirely Web-based, he said.
NCHA moved into the image exchange era in November 2002, when it settled a transaction between Intrust Financial Corp. of Wichita and BancFirst Corp. of Oklahoma City, the first check payment processed entirely through an image. The transaction moved through the Endpoint Exchange Network, and the NCHA remains the settlement agent for Endpoint.
