Check 21
The Check Clearing for the 21st Century Act, also known as Check 21, was signed
into law in October, 2003. Check 21 requires all banks to accept substitute checks
as of October 28, 2004. The idea behind Check 21 is to improve the efficiency and
reduce the cost of the nation’s check collection system.
Check 21 makes it legal for financial institutions to exchange electronic images
of your checks instead of the original paper check. When and if it is converted
back to paper it is called a substitute check. A substitute check is the legal equivalent
of the original check, and is derived from an electronic image of the check.
What does this mean for you?
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Checks will clear faster, reducing the amount of float time. If you rely on the
float time of a check, you may want to change your check-writing habits.
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If you receive your original checks or images of your checks with your monthly statement,
you may start to see substitute checks.
If you have additional questions about Check 21, please do not hesitate to
contact us.
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