Check 21

Important Information on the Legislation

The Check Clearing for the 21st Century Act, commonly referred to as Check 21, took effect on October 28, 2004. The goal of Check 21 is to improve the overall efficiency of the nation’s check payment system by eliminating the need to physically transport checks between banks.

Check 21 allows original paper checks to be removed from the collection process and be replaced with paper reproductions, called substitute checks. Substitute checks are created from digital image files and are the legal equivalent to the original paper check. Banks are able to send these check images electronically, reducing dependence on transportation that can be impacted by uncontrollable delays, such as weather or natural disasters.
Check 21 is only the first step toward more efficient processing and clearing of checks. It fosters more efficient check processing, reduced overhead costs, and increased fraud prevention. But, while it may make a big difference to banks, it has little impact on most customers.

How does Check 21 affect you?

  • If you receive electronic images of your canceled checks with your account statement or online, you may also see images of substitute checks.
  • Checks may clear sooner, so it is increasingly important for you to have the funds in your account at the time you write a check.
  • It does not change the way you write checks. Check 21 simply requires banks and customers to accept paper reproductions of checks, which are called substitute checks.

What is a substitute check?

Check 21 created a new legal document, called the “substitute check.” A substitute check is a paper reproduction of the original check, both front and back, with all endorsements. It is created from a digital image of the original check and is about the size of a business check.

It can be used for proof of payment and is the legal equivalent of the original check. The front of a substitute check states: “This is a legal copy of your check. You can use it the same way you would use the original check.”

Click here to view a substitute check (PDF)

Still have questions?

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