You probably don’t think much about your checking account. Money comes in, money goes out, and it came with a nifty debit card. Like anything else, checking accounts have a rich history with plenty of fun anecdotes. This may just be what you need to win that trivia night. So in honor of those who ever looked at a check and asked why, these fun checking history facts are for you.

Birth of Checks. The generally accepted origin of checks, as a means to pay debts, arose in the 1500s in Amsterdam. Merchants, traveling to the city, found it burdensome and dangerous to carry large amounts of gold and silver coinage. Dutch “cashiers” offered a service of storing merchants’ money locally for a “holding” fee. Eventually, competition forced the cashiers to agree to offer more services, such as paying debts on behalf of the merchants per a written order or note. These notes dictating amount, payee, and purpose became the basis of the modern day check. The official term “check” was coined in England in the 1700s when serial numbers were added to these notes “to check” or verify their authenticity against an official register.

Why Can’t You Write Below the Endorsement on Checks? Ever wonder what the purpose of the large blank area on the back of the check is for. In the not so distant past, think pre-2004, checks were physically transported to the bank they were drawn off of for collection of funds and then those funds were delivered back to the payee bank. The area on the back of the check was reserved for bank stamps, which traced the path of the checks as they travelled through intermediary banks on the way to their final destination. The introduction of Check 21 in October 2004 made the check stamping process antiquated by allowing checks to be imaged and processed electronically between banks. However, the law did not require banks to accept checks electronically and thus the area is reserved for more “old school” financial institutions.

Would You Like a Toaster With That? In response to the Great Depression, it was argued that competition amongst banks was driving up interest rates causing banks to make riskier loan ventures in order to turn a profit. The Banking Act of 1933 included Regulation Q, which prohibited banks from offering interest on checking accounts and created savings account interest ceilings. The idea was to limit competition and thus encourage banks to make less risky loans, which could help limit bank failures during recessions. However, as the economy rebounded after World War II, banks were increasingly looking for an edge or loophole. They found just such a loophole within Regulation Q that suggested premiums in the form of merchandise, credit, or cash could be regarded as an advertising expense rather than payment of interest as long as they did not exceed $10. Banks began offering promotional gifts for new accounts in the form of toasters, blenders, and other inexpensive utility items. The use of toasters became so popular that Section 217.101 of Regulation Q became known as “The Toaster Rule”. Ironically, Regulation Q was withdrawn in 2011, as part of the Dodd-Frank Act, stating that it’s ceilings on interest rates prompted consumers to invest elsewhere causing banks to make riskier loan ventures to make up for the loss in deposits.

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