The Check Clearing for the 21st Century Act is a federal law that took affect on October 28, 2004 – usually referred to as Check 21. This law changed the way checks can be processed throughout the United States.

Today, checks must be physically transported – whether across town or across the country, by truck, plane or train – before they can be cleared. This is an expensive and time-consuming process. Check 21 provides a new option: legal acceptance of paper reproductions of original checks. This reproduction is called a “substitute check” and is produced from a digital image of the original check. The “substitute checks” can be transmitted electronically and output as the paper reproduction at the receiving end, sometimes saving days in the settlement process.

By October 28, 2004, every bank in the Nation is required to accept substitute checks, just as they currently accept your original paper checks. Whether you currently receive cancelled checks or images of your cancelled checks with your statement, after October 28, 2004 you will begin to see substitute checks as well.  A substitute check is the legal equivalent of the original check and will include all of the information contained on the original item. 

So while Check 21 means big changes in the financial industry, the net effect to our clients is simply more efficient and convenient banking.

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