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Check 21 Federal Bank Law - How Does This Change Affect You?

Does Check 21 affect all of us? If you presently do not receive your canceled checks with your bank account statement, or pay your bills online, this new law will not affect you to any extent.



When does this law become effective?

The law is in effect now. The Check Clearing for the 21st Century Act or Check 21 was signed into law on October 28, 2003. It became effective on October 28, 2004.

What is Check 21?

Check 21 is a federal law that is designed to enable banks to handle more checks electronically.

How does Check 21 work?

Instead of physically moving paper checks from one bank to another, Check 21 allows banks to process checks electronically.

Is Check 21 Safe?

Yes. This process is not new to the financial industry.

Is this a better system for me?

Not necessarily. You may have noticed that your checks seem to hit the bank faster these days. Check 21 will further increase check-processing speed. When writing a check don't count on any delays. You should make sure your account has enough money in it to cover the check the day you write it.

How does Check 21 affect my bank statements?

If you have always received your paid checks in statements, Check 21 now permits your bank to provide either the original check or a substitute check.

Can I make that decision?

No. Your bank makes that decision.

What is a Substitute Check?

A substitute check is a special paper copy of the front and back of your original check. It can be processed as if it were an original check. The front of a substitute check will state, "This is a legal copy of your check. You can use it the same way you would use your original check." Substitute checks may be slightly larger than your original checks.

I Just Received my bank statement with images of checks I have paid. Are these substitute checks?

No. These images are not substitute checks. This is your monthly statement (Image Statement) these are not substitute checks. In essence, they are your canceled checks. These statements should be filed away as you would your canceled paper checks. Image statements can be used to show that a bill has been paid. They show the front and back of your check.

Please see the Federal Reserve Board's page "Frequently Asked Questions about Check 21" in Related Articles at your right.


NOTICE: This information is not legal advice and should not be construed as legal advice. Check with your bank concerning its Check 21 policy.

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