Check 21:  What is it?

Effective October 28, 2004, the Check Clearing for the 21st Century Act - or "Check 21" will bring the nation's check payment system into the digital age and allow consumers to benefit from better and faster financial services.

Check 21 will improve today's existing system that forces over 40 billion checks a year to be exchanged physically and often transported around the country several times before the payment cycle is completed.

How will Check 21 Benefit You?

• Detects Fraud Faster - Since check clearing is faster, fraud can be detected and investigated sooner which brings about a quicker resolution.

• Faster Check Clearing - You get a more accurate picture of your account balance.

• Quicker Response - Check images can be accessed faster to resolve questions.

• More Secure Check Information - Checks do not have to be physically transported via truck, train, or plane.
  
   

How?  With a Substitute Check...

Check 21 allows a new approach - it makes legal a Substitute Check which is a digital picture of your original check (showing the front and back with a magnetic ink character recognition line and all of its routing data) which can be processed electronically.

• A substitute check is the legal equivalent of our original for all purposes including requirements of state and federal law.

• The substitute check will feature, in bold print, a legend that states "this is a legal copy of your check - you can use it the same way you can use the original check".

• A substitute check provides legal proof that you made payment.

• You may receive a substitute check when you request a copy of your check.

Consumer Protection
If a consumer believes that a substitute check was not properly payable, he or she may file an "expedited re-credit" from the paying financial institution.  The financial institution must investigate any claim and in most cases either resolve the claim within 10 business days, or provide the consumer with an expedited re-credit of up to $2,500.00 pending completion of the investigation.  In general, 45 days is the limit to conclude the investigation and make a final determination.

When?
Check 21 becomes effective on October 28, 2004 and that is when all financial institutions will have to accept substitute checks the same way they are required to accept paper checks.

Remember, the substitute check contains exactly the same information shown on your original check and it is considered a legal equivalent.

Important Note
Please remember, since these changes will drastically reduce the amount of time it takes to move money from your account to pay those who receive your checks, you will need to have sufficient funds in your account to cover the payment at the time you write the check.