Magazine article American Banker

Chase, in First for Big N.Y. Bank, Joins Clearing House

Magazine article American Banker

Chase, in First for Big N.Y. Bank, Joins Clearing House

Article excerpt

The Chase Manhattan Bank has become the first leading New York bank to join a national check-clearing group, boosting an organization that had been shunned by many of the country's largest banks.

Many banks have steered clear of the two-and-a-half-year-old National Clearinghouse Association because of fears that its check settlement system would cut into their correspondent check-clearing business.

But, as membership and clearing volumes grow - the association's 35 bank holding company members now clear more than one million items a day - opposition is falling away.

More to Gain

Chase decided it has more to gain by joining the group than by ignoring it.

"The association has reached a critical mass where it makes sense now for Chase Manhattan to join," said Charles H.S. Mallis, marketing and product management executive for Chase's global cash management businesses.

Mr. Mallis added that he expected other leading New York banks to join the group.

Indeed, the National Clearinghouse also announced that Chemical Banking Corp.'s Texas Commerce unit is joining. Association officials expect Chemical's New York flagship bank to join in a few months.

Four other major banks are also joining - namely, First Union Corp. of Charlotte, N.C., Bank South Corp. of Atlanta, Cullen/Frost Bankers of San Antonio, Tex., and National Commerce Bancorp. of Memphis.

Half-Cent Charge

The National Clearinghouse was formed in July 1991 by seven banking companies, including Huntington Bancshares of Columbus, Ohio, and Fleet Financial Group Inc. of Providence, R.I.

Under the clearing house rules, members can only charge each other a half-cent for clearing items through the system, well under the 2 to 6 cents normally charged.

The fee reduction is justified by a reduction in clearing expenses. …

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