ALBANY, N.Y. – Though Check 21 isn't a done deal just yet andits effects won't fully be realized for a few years, the $4.7billion Empire Corporate isn't wasting any time laying thegroundwork to take advantage of it. In a major deal, Empire hasformed an agreement with Small Value Payments Company, LLC (SVPCo)to cooperate on system connectivity for electronic exchange ofcheck data and images between their Empire's CUs and SVPCo'sfinancial institution clients. The deal is key because of the majorplayers SVPCo will be able to connect Empire with for imageexchange. Formed in 1998, SVPCo is owned by 22 of the largest U.S.clearing and issuing banks. SVPCo owners hold over $2.448 trillionin deposits and represent 59% of commercial bank deposits. “Thereason we chose SVPCo is the exchanges we'll be able to do with thelargest institutions in the country. They will bring the highestvolume of items. It gives us a piece of that game,” said NancyVirkler, SVP, Operations for Empire. Virkler said the key withCheck 21 and the SVPCo deal is going to be limiting the actualphysical movement of checks and also limiting the number of timesan image is captured. “You write me a check drawn on Bank ofAmerica. I get the check and process it on behalf of our members. Iwould be able to send the image of the check to SVPCo for clearingrather than forwarding it on to Bank of America. If I didn't havethe agreement we'd have to go directly to Bank of America,” saidVirkler. In forward presentment, Empire can just send the images toSVPCo, allowing it to leave the paper checks in its shop andeliminate any shipping costs. “We're not flying them anywhere,instead the images are sent out according to the arrangement.” Thenif another financial wants access to those images, they go to SVPCofor the images. “Given that Empire Corporate and SVPCo clients havea large number of checks drawn on each other, it is critical thatwe work together to design our image exchange efforts,” said HankFarrar, President of SVPCo. Not only does SVPCo have 22 of thelargest banks, Virkler said they are setting up arrangements withother entities that will give Empire even more connections toexchange images. She said Empire could form more deals like theSVPCo one, but “every agreement you get means another telephoneline.” Empire provides item processing for 550 of its member CUsthrough a network of image-enabled check processing centers. Lastyear it processed over 167 million in-clearing items on behalf ofmembers. An SVPCo study recently found that electronic check imageexchange will reduce industry wide operating costs for checkexchange by $2.1 billion annually for financial institutions.Although Check 21 will have much more impact on banks than CUsbecause CUs have been truncating for years, Virkler said theimaging technology Empire has invested in will get greater use. “Westill see great opportunities to speed up the process,” she said.As for hardware requirements of the SVPCo deal, Virkler said itwill require some additional hardware on Empire's end, though she'snot sure on the specifics as of yet. [email protected]