The official name of the act is The Check Clearing for the 21st Century Act. Basically it allows banks to do away with original paper checks and instead transmit electronic images. The goal of the new way of presenting and collecting checks is to do away with the necessity of original paper checks being physically transported all over the country and to speed up the process of collection of funds.

It may affect you in different ways:

Checks you write will clear sooner, so you’ll want to be sure you have money in the account before you write the check.

Eventually, when all financial institutions are capable of total electronic clearing, it will mean your deposits will be available much sooner.

You may also notice a change in your monthly statement of your account.

If you get back actual, original checks now, you may begin to receive a combination of original checks along with some substitute checks.

Financial Institutions that supply image statements may have some original check images and some images of the substitute checks.

Customers who currently receive only a record of check number, amount, and date paid (truncated or check safekeeping accounts) will not find their statement affected at all.

No, I'm sorry you can't. This law affects every checking account at every financial institution.

Yes it will.

Checks will be clearing more quickly, so deposits should be made before checks are written. In order to avoid being overdrawn, you'll need to make sure that you have a high enough balance in your account to cover any checks you send out. Depositing funds after the fact to cover already-written checks may result in overdraft charges if the deposited funds are not available before the check you wrote clears.

Not right away.

The Check 21 legislation doesn't affect the hold times placed on deposited items. But it does mean that the actual funds will make their way through the system more quickly and it reduces the time that you'll wait for checks to clear if one of your checks is truncated. Eventually, when everyone goes to total electronic banking, we expect the whole process will be considerably faster and availability times may then change. And because the process will allow checks to clear more quickly, it should reduce fraud.

Legislation aimed at improving the efficiency of our country's payment system allows checks to be "truncated". This means the original paper check is removed from the check collection or return process and an electronic image of the item is created in lieu of the original item. The bank that truncates can then pass on a substitute check, which is a paper copy that is the legal equivalent of the original, or can pass on the image, if the next institution in the chain agrees to accept an image.

No Problem!

You'll be able to receive a special kind of copy of the check called a "substitute check". The substitute check will be treated the same as the original check under state and federal law. The new Check 21 Act says: "A substitute check shall be the legal equivalent of the original check for all purposes".

Not all checks will be truncated, so if you have been accustomed to getting your original checks back, you may still get some of them back (although it appears that a majority of institutions will be using purely imaged statements, rather than hassling with statements that contain a mixture of original checks and substitute checks.) Your statement will then contain some original checks and some substitute checks (paper reproductions of the originals). The institution that converted your check to an image will some days later destroy the original check.

It will have additional information on it, including:

• the identifying number of the bank that imaged and will destroy your original check
• the identifying number of the bank that created the paper substitute check from the image
• and a second MICR line at the bottom

It will be presented on two sides, just as your original check is, and should show the endorsements that have been applied as the check has gone through the clearing system.

It will also bear the following language: "This is a legal copy of your check. You can use it the same way you would use the original check."

You will be able to use a substitute check to prove that the check was written and cleared through the system.

To view a substitute check, please access the attached file.

There may be a fee to produce a copy of a substitute check, just as there may be a fee to order past copies of your monthly statements.

No.

There will be no additional charges to you for the image processing of your check.