book of checks with pen

Check 21

What is Check 21?
The Check Clearing for the 21st Century Act, otherwise known as Check 21 allows banks to replace original paper checks with "substitute checks" that are made from digital copies of the originals.

Why was Check 21 created?
Check 21 was created to reduce the time, risks and costs associated with paper check processing. Currently, checks travel on trains, planes and automobiles during the clearing process. When Check 21 becomes effective, banks will be able to send digital images of checks electronically, eliminating the need to physically transport paper checks between banks. Check 21 will also reduce uncontrollable transportation delays that can be caused by weather or natural disasters.

What does Check 21 do?
Check 21 will create a more efficient check processing system, without changing the way consumers write checks. It simply requires banks and customers to accept paper copies of their original checks called "substitute checks."

What is a substitute check?
A substitute check is a paper copy of the digital image of your original check - both front and back, with all endorsements - and is about the size of a business check. Check 21 legislation sets standards for quality and allows for substitute checks to be legal copies of the originals. All banks must accept the substitute check, as they would be the original document.

How will Check 21 impact me?
As a customer of Monticello Banking Company, you have been receiving images of your checks for several years now, so you may not notice a change in that area at all.
However, check processing will be faster with the implementation of Check 21. Funds may be removed from your account sooner than in today's system, therefore there will be less "float time". As always, make sure you have enough money in your account before writing a check.

When will Check 21 take effect?
Check 21 was signed into law October 28, 2003 by President Bush and became effective October 28, 2004.

Are substitute checks an acceptable proof of payment?
Yes, Check 21 mandates the acceptance of a substitute check.

What happens to my original check?
After taking a digital image, the bank may destroy your original check. If necessary, a substitute check may be created. Since substitute checks are legal copies of your original check, there is no need to save the original.

How will I benefit with Check 21?
  • You may have earlier access to your funds and faster, more convenient access to information about your checks - such as online images.
  • You'll have better fraud protection. Faster processing means faster detection and faster resolution.
  • If you detect a problem because of a substitute check, Check 21 requires that the bank credit your account, pending an investigation.
What items are subject to Check 21?
All checks, including cashier's checks, payroll checks, personal checks and business checks are subject to Check 21. Savings bonds are not checks and therefore are not subject to Check 21.