The banking industry, which is fighting Congress over a plan to force banks to clear checks faster, declared itself innocent of allegations that it holds checks longer than necessary to profit by investing the funds.

The American Bankers Association, an industry lobby group whose members represent 95 percent of U.S. banking assets, released a study yesterday that says banks hold only three checks out of every 10,000 beyond the one to three days the Federal Reserve System needs to give initial clearance to a check.

"The widespread perception is that bankers hold checks far longer than they have to, and in the meantime profit off a massive float," ABA President Donald Senterfitt said in a prepared statement. "The reality, however, is just the opposite."

The ABA said that when banks hold funds longer than three days, the bank is making sure it has enough time to return a check if it bounces. "It's the exceptional check that is held. It's a new account where the bank doesn't know the customer or it's a large amount," ABA spokesman Fritz Elmendorf said.

In addition to interest earned on money that is held and invested, banks collect billions of dollars in penalty fees for bounced checks, many of which would have cleared had deposited checks been credited more quickly, according to aides on the House Banking Committee. The committee estimated that U.S. banks earn more than $3.4 billion in fees from bounced checks and $290 million on "float" interest.

Earlier this year, the House approved a bill that would place rigid limits on the holds placed on checks for business and personal customers. The Senate has not yet acted.

Bankers in the D.C. area have said that fraud will rise and they will be forced to raise fees if Congress passes the law.

Last month, the Maryland legislature killed a bill to limit check holding to three days after local bankers protested it would cost them $170 million in lost interest.

Under the proposed House bill, after three years, funds from local and in-state checks would have to be made available for withdrawal the next business day following deposit, and funds from all other checks would have to be made available after three intervening business days following deposit.

Several studies by consumer groups contradict the ABA's conclusion that banks do not abuse the check-holding privilege. Last year, for example, the United States Public Interest Research Group, a consumer lobby, found that more than 70 percent of 669 financial institutions in 10 states hold local checks for three or more days.

For its study, the ABA surveyed 279 U.S. commercial banks with assets of more than $300 million.