Check 21 Notice
Information for our Customers
New Rules for Check Clearing in the 21st Century ("Check 21")
Check 21 and Substitute Checks
- Check 21 is a federal law, which has taken effect on October 28, 2004. Check 21 allows a bank to use image technology to create a paper copy of the front and back of an original check. This copy is called a "substitute check" if it meets industry standards. A substitute check will always bear the following legend: "This is a legal copy of your check. You can use it the same way you would use the original check."
- A substitute check is the legal equivalent of the original check. This means that a proper substitute check provides proof of payment.
What this means for you:
Receiving Substitute Checks: If you currently get your original cancelled checks back with your monthly statement, you may get substitute checks instead. If you currently receive check images with your statement, your imaged statement may contain images of substitute checks rather than images of original checks. If you request an original check or a copy of an original check, you may get a substitute check or a copy of a substitute check, rather than the original check or a copy of the original check.
Faster Check Processing: Check 21 will make check processing faster, which makes it even more important than ever to have enough available funds in your account before you write a check, because checks will clear sooner. As a result of Check 21, more checks will be processed electronically, which means the clearing process will be much faster. This faster processing time may also reduce the time you have to place a "stop payment" on a check you have written.
Check 21 Customer Protections: Check 21 gives bank customers certain rights to recover funds they have lost because a substitute check was used instead of an original check. For example, if the wrong amount has been charged to your account or a check has been charged twice, you may be entitled under the law to obtain a refund of your loss. There are procedures to follow if you believe the use of a substitute check has caused you to suffer a loss and you may contact your local branch for assistance.
Other Types of Transactions: There are other types of transactions that turn your paper check into an electronic transaction. A growing number of companies have adopted this process to handle large numbers of checks that are sent to them. This might include your utility company, telephone company or credit card company. These companies create an electronic entry, which is charged to your checking account just as the paper check would have been charged to your account. The paper check is then destroyed so that a duplicate posting to your account cannot occur.
Another type of electronic transaction may occur if a merchant converts your check into an electronic entry at the point of purchase. The merchant scans the check you wrote for a purchase to capture account information. You will sign a receipt to authorize the electronic debit and then the merchant will mark your check "void" and return it to you. This transaction will appear on your statement as an electronic debit. These types of transactions are not substitute checks.
If you have any questions about this new law please contact the branch manager at your local office.
