 |
|
|||
 |
||||
       |
    |
On October 28, 2004, the process of Check Clearing joins the 21st Century.
What is Check 21?
On October 28, 2004, the "Check Clearing for the 21st Century Act" also known as "Check 21" makes legal the creation and use of Substitute Checks.
Substitute Checks:
1. are paper reproductions of your Original Check created from a digital image of the original check, which was captured by the institution that "truncated" or removed the original check from circulation.
2. bear the legend "This is a legal copy of your check. You can use it the same way you would use the original check."
3. show both the front and back of your check with a MICR line that includes all the original information from your original check.
4. can be processed by financial institutions in the same manner as the original checks.
Why?
Currently, the check processing system relies on physical transportation to move paper checks from point A to point B; an expensive time consuming means of transportation which can be adversely affected by a multitude of events such as inclement weather, equipment breakdown and terror threats. Legalizing the creation of a substitute check gives financial institutions the ability to move a digital image of a check through an electronic exchange. If a Physical Check is ever needed, the digital image can be used to create a paper reproduction "substitute check" at any point in the process.
How Check 21 Affects You
1. Increased Fraud Detection - Since checks clear faster you'll know sooner if there is a fraudulent situation, which then can be investigated in a timelier manner.
2. Faster Check Clearing - Gives you a more accurate picture of your account balance.
3. Statements - Every bank will be required to accept substitute checks, just as they currently accept your original paper checks. In your image statement, you may begin to see images of substitute checks after October 28th 2004. If you request to receive the copy of the original check, we may only be able to provide a copy of the substitute check.
4. More Secure Check Information - Checks moving through a secured electronic exchange, create less of an opportunity for check information to be misused.
5. Float - Due to the speed of the electronic Exchange, float may be greatly reduced. You should have sufficient funds in your account to cover a payment at the time you write a check.
6. Warranty - A bank that transfers, presents or returns a substitute check and receives consideration for the check warrants: 1.) The substitute check meets all the requirements for legal equivalence of the original check; 2.) that no bank, drawee, drawer or endorser will be asked to make a payment on a check that has already been paid.
Other Forms of Check Conversion
Check 21 does not regulate the following popular check conversions:
*POP - a merchant Converts a paper check to an ACH Payment on the spot and then returns the check to you right away.
*ARC - Regular billers (telephone, utilities and credit card providers to name a few) convert your check payments to ACH Payments and although you will see the payment on your statement you will not receive a copy of that check.
What is Check 21?
On October 28, 2004, the "Check Clearing for the 21st Century Act" also known as "Check 21" makes legal the creation and use of Substitute Checks.
Substitute Checks:
1. are paper reproductions of your Original Check created from a digital image of the original check, which was captured by the institution that "truncated" or removed the original check from circulation.
2. bear the legend "This is a legal copy of your check. You can use it the same way you would use the original check."
3. show both the front and back of your check with a MICR line that includes all the original information from your original check.
4. can be processed by financial institutions in the same manner as the original checks.
Why?
Currently, the check processing system relies on physical transportation to move paper checks from point A to point B; an expensive time consuming means of transportation which can be adversely affected by a multitude of events such as inclement weather, equipment breakdown and terror threats. Legalizing the creation of a substitute check gives financial institutions the ability to move a digital image of a check through an electronic exchange. If a Physical Check is ever needed, the digital image can be used to create a paper reproduction "substitute check" at any point in the process.
How Check 21 Affects You
1. Increased Fraud Detection - Since checks clear faster you'll know sooner if there is a fraudulent situation, which then can be investigated in a timelier manner.
2. Faster Check Clearing - Gives you a more accurate picture of your account balance.
3. Statements - Every bank will be required to accept substitute checks, just as they currently accept your original paper checks. In your image statement, you may begin to see images of substitute checks after October 28th 2004. If you request to receive the copy of the original check, we may only be able to provide a copy of the substitute check.
4. More Secure Check Information - Checks moving through a secured electronic exchange, create less of an opportunity for check information to be misused.
5. Float - Due to the speed of the electronic Exchange, float may be greatly reduced. You should have sufficient funds in your account to cover a payment at the time you write a check.
6. Warranty - A bank that transfers, presents or returns a substitute check and receives consideration for the check warrants: 1.) The substitute check meets all the requirements for legal equivalence of the original check; 2.) that no bank, drawee, drawer or endorser will be asked to make a payment on a check that has already been paid.
Other Forms of Check Conversion
Check 21 does not regulate the following popular check conversions:
*POP - a merchant Converts a paper check to an ACH Payment on the spot and then returns the check to you right away.
*ARC - Regular billers (telephone, utilities and credit card providers to name a few) convert your check payments to ACH Payments and although you will see the payment on your statement you will not receive a copy of that check.
 |
 |
 |
 |
 |
 |
 |
 |