It always amuses me to watch the reaction of consumers like Herman Stein to the coming changes in the banking industry ("Don't Do Us Any Favors, Banks," Letters, July 14). In this case, we have the not-so-new innovation of the non-return of canceled checks in customers' statements. It seems that Stein, among others, has not fully examined this issue but is all too ready to criticize its propriety. Let's look at what brought about this concept of "check safekeeping."

The banking industry is, as everyone knows, going through some difficult times. We will note, although not dwell on the faltering economy, poor investments, bad loans and weak management--all taking their toll on the return on equity and return on investments in banks. We should also acknowledge the impact of significant deregulation and its impact on the interest expense that banks now must pay its customers on a plethora of interest-bearing accounts.

Any banker can explain in detail how interest margins have squeezed and profits have diminished. But don't misunderstand, our hearts should not bleed for the poor banker, for much of this is self-inflicted. It remains, however, for the creative people in this business to find ways of meeting the challenges of rising costs of funds and rising operating costs.

Check safekeeping is one way of reducing operating costs in a bank. The advantage that the consumer receives is a reduction in the service charge he may pay on his account.

It does cost something to prepare a statement for mailing, and as every citizen knows, postage has risen dramatically in the last five years. The average non-business statement mailed out by a bank with checks included costs about 40 cents in postage expense. If the bank has 10,000 non-business customers who receive a monthly statement, the postage expense alone can reach $48,000 annually.

By not mailing out the checks with the statement the postage expense can't exceed 22 cents. There is some real savings there, especially for the banks with a large non-business account base. But that's only the beginning; there are a number of handling processes that go on behind the scenes that are reduced or eliminated if checks are not returned, and that's where additional savings can be achieved. And those savings should be passed on to the customer.

Several Arizona banks have taken full advantage of this concept and have educated their customers to a point where upwards of 45% of the banking public have elected to dispense with their checks being returned. Alternate methods of balancing statements and obtaining a copy of a check have been introduced and the program has been very successful.

What is important to understand is that the bank does indeed wish to provide the best service possible. Through the years very little has been eliminated from "full service banking"--on the contrary, all the old (and sometimes outdated) products and services are there for you, and every now and then something new comes along.

I know of no bank that will force you to give up your checks in your statement if you really want them or need them. But I believe that many banks will soon offer check safekeeping for those of us who can do without them. I suppose you could call these people "deep thinkers." This kind of change is good for all of us, and it pays to consider how you might do without getting those checks back every month to look at briefly and take up space forever.


El Toro

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