Constitution is First East Coast Corporate to Complete Image Exchange Testing with Fed

WALLINGFORD, Conn. – Constitution Corporate CU said that it has completed image exchange testing with the Boston Federal Reserve, making it the first corporate on the East Coast to do so. The testing lasted about a week. “We can now send images of checks as forward collection items to the Fed. Right now we do have a couple of credit unions sending us images from their branches and we’re sending those images directly on to the Fed for clearing,” said Bill White, executive vice president for Constitution. White said prior to this, the corporate was printing substitute checks for these CUs and sending physical items to the Fed. It no longer has to do that for CUs that are image enabled. He said it’s too early to tell how much volume these CUs will generate. Constitution made headlines earlier this year when one of its largest CU members, Charter Oak, began transmitting images to the corporate from one of its branches. Constitution said since that successful pilot, CU interest has been strong. “There are already six credit unions in the process of purchasing the equipment to do this and a lot more are interested,” said White. The credit union industry is way ahead of the large banks on image exchange and it won’t fully take off until they get up to speed. Still, White says there are advantages to going electronic even without the big banks. He cited three immediate benefits – lower courier costs, expedited returns and reduced risk of fraud. He also noted that even for CUs that are still physically sending checks to the corporate, the corporate can use its exchange pipeline with the Fed in cases such as large dollar checks, which could give CUs some added days of interest. Checks over $5,000 would fall into this category. “Our next step is we’re going to be able to send to the Fed cash letter return items as images. We no longer have to go through the tedious task of pulling return items. We can use our new post-Check 21 software to ID the return times,” said White. Constitution is utilizing VSoft Corporation’s Check 21 suite for its image exchange. [email protected]