What is the Nonpar item’
The item is a nonpar check, draft or negotiable instrument that a paying Bank honors at a discount subject to the presentation of another Bank for collection. The discount is deducted from the cheque (or document) of the nominal value.
Nonpar banking, the practice of charging fees to complete the project, or a check drawn on another Bank, was commonplace in the USA until until the Federal reserve check collection was created in 1916.
The destruction of Nonpar item’
State banking officials were the main competitors on the steam banking, the Federal reserve system because it would eliminate an important source of income – fees to enable the exchange of financial instruments with other countries.
Before the Federal reserve check collection, banks will charge a significant fee to translate blueprints into the currency, as a rule, for inclusion in the project owner for the purchase of land. Most of the land authorities only accepted payment form of packages. To avoid charges of nonpar collection, banks will send checks to banks with which they had a “couples” relationship to the payment, which often began a long process of taking the long route to the USA for final collection. Exception nonpar banking activities through the establishment of effective collection and treatment system was one of the first objectives of the Federal reserve system.