Check 21 Information

Check 21: What Is it?

Effective October 28, 2004 the Check Clearing for the 21st Century Act or “Check 21” will go into effect. Check 21 will improve efficiency in check processing by allowing a substitute check instead of an original check A substitute check is a copy of the original check that is the same as the original check for all purposes, including proving that you made a payment. It must include 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.

Check 21 will improve today’s existing system that forces over 40 billion checks a year to be physically transported around the country several times before the payment cycle is completed. This is what allowed a float time for checks that were written.

What Does Check 21 Mean To You?

Faster Check Clearing - There will no longer be a float period. The check could clear the same day you write it depending where it was written.

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

No Transport - Checks do not have to be physically transported via train, truck or plane.

Check 21 becomes effective 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. .

IMPORTANT INFORMATION

Please remember that 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.