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Check
21 Questions & Answers
Important Information
Check 21 Questions and Answers
You Should Know About Your Checks
Beginning October 28, 2004, when you request a copy of a check
we paid it may look different than the check you wrote. A new
federal law called "Check 21" permits institutions to
replace original checks with "substitute checks." One
effect of the law is the period between when you write a check
and when that check clears your account ("float") may
get shorter. We want to provide you with questions and answers
you should know about your checks under Check 21.
What is Check 21?
Check 21 Act is legislation that allows financial institutions
to substitute a machine-readable copy of a check ("a substitute
check") for the original check for collection or return.
This allows financial institutions to process checks electronically
rather than by transporting them via truck, train, or airplane.
Substitute checks that meet the requirements of the Act will be
the legal and the practical equivalent of the original check.
Why was Check 21 created?
Check 21 was created to reduce the time, risks, and costs associated
with paper check processing and transportation. It allows original
paper checks to be removed from the collection process and be
replaced with substitute checks created from digital image files.
Financial institutions can send check images electronically, reducing
dependence on transportation that can be impacted by uncontrollable
delays, like weather.
What does Check 21 do?
It streamlines check processing and it simply requires financial
institutions and members to accept paper reproductions of original
checks. These reproductions are called substitute checks.
What is a substitute check?
A substitute check is a copy of an original check that is the
same as the original check for all purposes, including proving
that you made a payment, if it includes an accurate copy of the
front and back of the original check and contains the words: "This
is a legal copy of your check. You can use it the same way you
would use the original check." A substitute check that meets
these requirements is generally subject to federal and state laws
that apply to an original check.
Why will Check 21 reduce float?
Check 21 is designed to encourage electronic collection of checks.
By not physically transporting checks between institutions, Check
21 will reduce the time it takes for a check to get from the institution
where it was deposited to the institution that will pay it.
Do I have to accept substitute checks as proof of payment?
Yes. Once a paper check is converted into a substitute check,
it becomes the legal equivalent of the original paper check. Any
financial institution may accept them as if they were the original
checks.
Which checks are eligible to become substitute checks?
All checks, except foreign checks, are eligible for conversion
to a substitute check including, but not limited to, consumer
checks, money orders, and travelers checks.
What happens to my original check?
There are no requirements governing the retention of original
checks by the financial institution that converts the item into
a substitute check. Original checks will most likely be destroyed
after a short period of time by the originating financial institution.
A substitute check made from the digital image becomes the legal
substitute for proof of payment.
What do I do if a merchant or other party needs a copy of my
check?
A substitute check is the same as the original check for all legal
purposes under state and federal law. If you need to provide a
copy of a paid check to anyone, a copy of the substitute check
will be satisfactory.
If you have any additional questions, please call 480-967-9475
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