Saying that check forgery is on the rise, Wisconsin's community bankers are fighting a legislative proposal that would soften punishment for some check-forging offenses.

Current state law treats any check forgery as a felony punishable by a fine of up to $10,000 and 10 years in prison. Under a provision supported by Gov. Tommy Thompson, a Republican, a check forgery for less than $1,000 would be classified a misdemeanor, punishable by nine months in jail, at most.

The measure was inserted into the $37 billion biennial budget bill passed last week by the Assembly, the lower of the state Legislature's two houses. It's supported mainly by public defenders who say the volume of check forgery cases is overburdening the court system.

"Someone charged with a misdemeanor is going to be less inclined to take a case to trial," said Gina Pruski, deputy legal counsel in the state public defenders office.

Bankers, however, said the proposal would do nothing to reduce the number of check forgeries. In fact, they maintained, it could even lead to an increase.

"If someone is allowed to get away with the crime of check forgery today, then what kind of deterrent is that for tomorrow?" asked Charles Saeman, executive vice president of State Bank of Cross Plains and president of the Community Bankers of Wisconsin.

Federal Reserve statistics show that check fraud, which includes forgery, increased 300% from 1990 to 1994, costing banks, thrifts, and credit unions $10 billion to $50 billion a year. And while state-by-state data are difficult to obtain, Wisconsin bankers estimate they lose $6 million a year processing as many as 8,000 forged checks.

Dirk L. Gasterland, president-elect of the Wisconsin Bankers Association, said he was in Madison, the state capital, urging state senators last week to remove the forgery provision from the budget bill. The Senate is expected to take up the budget soon.

His concern, he added, isn't just for bankers but also for merchants to whom phony checks are written.

But time could be running out on the bankers. With the budget nearly three months overdue, Mr. Saeman said, legislators aren't eager to reopen the forgery issue if it would mean delaying passage of the overall bill.

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