Check 21 FAQs
What is Check 21?
When will the Check 21 legislation go
What is a substitute check?
Can I opt out of Check 21?
Are there other benefits of Check 21?
What if there is an error involving a
Does Check 21 apply to all types of checks?
What is the purpose of the Check 21 Act?
Q: What is Check 21?
A: Check 21 (Check Clearing for the 21st Century Act)
is a new federal law that took effect on October 28,
2004. It impacts all U.S. financial institutions, not
just First South Bank. The goal of Check 21 is to reduce
paper, combat fraud and streamline how checks are processed
through the banking system. It gives financial institutions
the option to move checks electronically by allowing
them to replace an original check with a substitute
check when necessary.
Q: When will the Check 21
legislation go into effect?
A: The new federal law took effective on October 28,
2004. At this time you may begin to receive substitute
checks in your monthly statement. The substitute checks
will include all the information on the front and back
of the original checks, including endorsements.
Q: What is a substitute check?
A: A substitute check is a paper reproduction of an
original check created during the check collection and
return process from an electronic image of the original.
It is a legal replacement for the original check. A
substitute check contains the same information as an
original check. It may be slightly larger than the original
check and will show a slightly smaller image of the
front and back of the check.
You may notice that some substitute checks look different
than others. The appearance of a substitute check depends
on which bank is processing the check and the type of
equipment they are using. However, a substitute check
will always include wording that identifies it as a
legal copy of the original check — “ This
is a LEGAL COPY of your check. You can use it the same
way you would use the original check.”
Q: Can I opt out of Check
A: No, Check 21 is a federal law. All banks and their
customers must comply.
Q: Are there other benefits
of Check 21?
A: Yes, with quicker processing, you will have more
up-to-date account balance information sooner.
Q: What if there is an error
involving a substitute check?
A: If you beleive you suffered a loss relating to a
substitute check that you received and that was posted
to your account, please contact us at 1-800-946-4178,stop
by your local branch, or write:
First South Bank
PO Box 2047
Washington, NC 27889
Q: Does Check 21 apply to
all types of checks?
A: Yes, all checks – personal checks, business
checks, cashier’s checks, money orders and government
checks – are subject to Check 21 and could be
converted into substitute checks. The only exception
is foreign checks.
Q: What is the purpose of
the Check 21 Act?
- To encourage banks to use image presentment
of checks by allowing a substitute check to
replace the original check.
- To foster innovation in the check collection
system without requiring that banks receive
all checks electronically.
To improve the overall efficiency of the United
States payments system.