daily nebraskan
page 7
Bank refuses Money Now checks ;
slow collection time, losses blamed
The Hairaiscrs II
friday, november 16, 1979
By Betsie Ammons
Bad check losses and slow, collection time has prompt
ed Gateway Bank to refuse to cash checks drawn on First
Federal Lincoln Mone Now acceunts, according to a
Gateway Bank official.
The Gateway Bank check cashing policy permits
them to cash checks of non-customers for a 25-cent fee if
the customer has two valid pieces of . identification.
The Money Now account enables a customer to put
money in a First Federal savings account to draw interest.
A zero-balance checking account also is established at the
New York Chase Manhattan Bank.
When checks are written they first are sent to Chase
Manhattan, which in turn wires First Federal for money
from "savings funds to cover the checks. 1
John McLaughlin, a Gateway Bank vice persident, said
the nature of these accounts makes collection difficult.
The First Federal-Chase Manhattan transaction takes
five days to complete McLaughlin said, and the parties to
whom the checks are written do not receive compensation
during that time.
McLaughlin said in essence the checks are drawn on
zero funds, and Gateway Bank would advance cash "'to
customers on Chase Manhattan's promise to pay if they
cashed the checks,.
Also, McLaughlin said, First Federal will not make cash
withdrawal from the savings account to cover bad checks
if Gateway Bank returns them for payment. He said that
presents a problem if they cannot contact the person who
wrote the check.
Union College radio
increasing wattage
Union College radio station KUCV-FM will be increas
ing its wattage from 10 watts to 20,000 watts.
Doug Morgan, program director for KUCV-FM, said
KUCV applied for the wattage increase last May from the
Federal Communications Commission.
In order to be eligible for a wattage increase, Morgan
. said the radio station must apply for a frequence increase
that. won't legally interfere with other stations, and myst
prove that the station is financially solvent.
With the wattage increase, Morgan said the station
would be able to broadcast in a 40-mile radius instead of a
ten-mile radius.
Morgan said because of what he considered quality
programming before the wattage increase, nothing would
be changed in future programming. He said the 12 student
employees would continue to broadcast classical music
because of the demand and would also continue to broad
cast public affairs, especially in the Union College com
munity. UNL's radio station, KRNU-FM, currently is running
on 10 watts, but will probably apply for an increase,
according to Peter Mayeux, program director for KRNU
FM. Mayeux said KRNU has about a 20-mile broadcasting
radius and employees about 75 part-time announcers and
35 news reporters.
KRNU is now re-broadcasting some programming from
UNO's radio station, KUNO, Mayeux said, and is using
computerized logs for certain segments of broadcasting,
which saves time and money.
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GATEWAY BANK has received more insufficient
funds checks on Money Now accounts than from any
other bank In Lincoln, McLaughlin said. . '
Vern Roschewski, a First Federal-Lincoln senior vice
president-treasurer said he sees no difference between the
Money Now account and zero-balance checking offered
by banks.
Zero-balance-checking accounts work the same as
Money Now, with a separate savings account collecting in
terest and a checking account which contains no money
until a check is drawn on the bank. However, the banks
handle both accounts within the same institution;
Roschewski refused to offer an opinion about Gate
way's refusal of the checks because of a lawsuit pending
between Nebraska banks and First Federal Lincoln con-.
testing Money Now.
However, he said he thinks their action "is due to the
competitive nature between the two financial institutions.
"Isn't it strange how banks react if you do not have an
account with the so-called brotherhood of bankers?" he
asked, .
Although no hearing date has been- set in the suit,
Roschewski said he thinks the matter will be settled by
expected federal legislation, legalizing Now accounts in
savings and loan institutions. ,
ROSCHEWSKI SAID First Federal cannot compensate
for insufficient funds checks by making direct cash with
drawals because the customer does not receive notice that
his check has cleared unless Jt is taken through Chase
Manhattan.
At First National Baok of Lincoln, Money Now checks
will be honored only if the customer has an account at the
bank, according to Ross McCown, FNL vice president an4
manager of customer service.
McCown said non-customers who wish to cash checks
on banks others than First Federal have only a slim
chance of being satisfied.
At the National Bank of Commerce, non-customer
checks are cashed for up to $25 for students. There is a 50
cent charge on all non-customer checks.
Tom Potter, an NBC executive vice president, said the
policy includes First Federal Lincoln checks.
"We have not altered our policy for these checks,"
Potter said, but added that it is "something to be considered."
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