Check 21 In October 2003, President Bush signed into law the Check Clearing for the 21st Century Act. Now known simply as 'Check 21', the legislation's goals include improving the overall efficiency of the nation's payments system. Today, most checks must be physically transported - whether across town or across the country - before they can be cleared. This is expensive and time-consuming. Check 21 provides a new option which is legal acceptance of paper reproductions of original checks. This reproduction is called a 'substitute check' and is produced from a digital image of the original check. What are the benefits to the consumer? The improvements brought about through Check 21 allow for faster payment processing and even better service to you, the banking customer. Some benefits include: Faster check clearing Less paper Faster discovery of fraud Increased security How will you be affected by Check 21? By October 28, 2004, every bank will be required to accept substitute checks, just as they currently accept your original paper checks. If you receive your cancelled checks or electronic images of your cancelled checks with your account statement, you will begin seeing substitute checks after that date. A substitute check is the legal equivalent of the original check and will include all the information contained on the original. Example of a Substitute Check: Frequently Asked Questions: When does Check 21 become effective? Signed into law on October 28, 2003, Check 21 will become effective on October 28, 2004. What does Check 21 do, and why should I care? Check 21 creates a new legal document, called the 'substitute check', which can be used for proof of payment or for any other reason that might require an original cancelled check. What is a 'substitute check'? A substitute check is a paper reproduction of the original check. To meet legal requirements it must: -Contain an image of the front and back of the original check. -Bear a legend that states, "This is a legal copy of your check. You can use it the same way you would use the original check." -Display a MICR line containing all the information appearing on the MICR line of the original check. Does Check 21 preempt state law? Check 21 supersedes any state law, including provisions of the Uniform Commercial Code or state laws that are inconsistent with the new federal law. Do all copies created from check image files qualify as substitute checks? No, only images that meet the "substitute check" requirements qualify. Typical check image statements are not considered substitute checks. Does this mean I won't be getting back my cancelled checks? In some cases, you may not receive the original. If you receive cancelled checks with your monthly checking account statements, some of the checks returned to you may actually be substitute checks, beginning October 28, 2004. The conversion is expected to be a gradual process, so you may see a combination of original and substitute checks with your statement. Can I "opt out" of Check 21? No, once Check 21 legislation goes into effect on October 28, 2004, it will apply to all bank customers, as well as retailers and service providers. There will be no exceptions. What happens to the original check? The Bank or Credit Union converts the original check to a substitute check and may then destroy the original check. The law does not impose any minimum time period on Banks or Credit Unions to keep the original item. What happens if there is an error involving a substitute check? If there is an error to your account relating to a substitute check, there is a process by which a consumer customer can make a claim for expedited re-credit. There is a time deadline for the claim to be made (40 days after you receive the statement or substitute check) and we have a deadline for dealing with the claim if it is properly made. By the end of the 10th business day following the business day the claim is made, we must either turn down the claim, approve the claim, or at least provisionally re-credit your account for the lesser of $2,500 or the amount of the check, pending further investigation. The final investigation, and final decision, must be concluded by the end of 45 calendar days from the date the claim is made. Once the investigation is finished, either the provisional credit becomes final, or a further refund is made (if the amount for the substitute check was over $2,500), or we will reverse the provisional credit if we determine your claim is not valid. Note: This expedited re-crediting procedure does not apply if you receive the original check or an image (rather than an actual substitute check). Consumer re-credit rights are further explained in a notice that we must provide all customers who will be receiving substitute checks. What other impact will Check 21 have on me? With Check 21, checks will be processed more quickly, which may result in funds being withdrawn from your account sooner than in today's environment. Because of this, you'll need to make sure that you have a high enough balance in your account to cover any checks you send out. Depositing funds after the fact to cover already-written checks may result in overdraft charges if the deposited funds are not available before the check you wrote clears. If you would like more information or have questions and/or concerns, please contact us by using our online form.