What you should know.
The intent of the Check 21 Act is to make check processing more efficient and cheaper, decrease processing time and transportation costs, and reduce the likelihood of items being lost or destroyed in transit. The Act allows financial institutions to replace original paper checks with “substitute checks.” The first step in creating a substitute check is to create an electronic image of the original check. This will allow institutions to begin processing checks electronically. Please note that this will reduce check clearing time from days to hours. If you’d like more information, please refer to our website and our staff is always happy to assist you.
Q. What is Check 21?
A. Check 21 is intended to modernize the way financial inst10:56 AM 7/7/2005itutions present checks for payment. The changes allow institutions to create a "substitute check" and present the check amount for payment electronically. Checks can clear your account in as little as one day instead of three to four days.
Q. When do the new rules take effect?
A. October 28, 2004. However, the changes are not mandatory and checks will be handled in both the paper format and the new electronic format, depending on the institution.
Q. How will Check 21 affect me?
A. Depending on who you write checks to and who they deposit through, your checks may clear your account faster than usual.
Q. How will these transactions appear on my statement?
A. You'll see the same information you see now including the check number.
Q. Will I still be able to get a copy of my check?
A. Yes! The new rules set the guidelines for creating a "substitute check." A substitute check is the legal equivalent to an original check. Copies of checks that are paid in paper format will look like they do now, while those paid electronically will appear in the prescribed format.
