Check 21 Act

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Check 21 is a Federal law that is designed to enable banks to handle more checks electronically, which is intended to make check processing faster and more efficient. Check 21 is the short name for the Check Clearing for the 21st Century Act, which went into effect on October 28, 2004.

The Check Clearing for the 21st Century Act (Check 21) enables banks to handle more checks electronically which can make check processing faster and more efficient. Traditionally, banks often physically move original paper checks from the bank where the checks are deposited to the bank that pays them. The former process of check transportation can be inefficient and costly.

Check 21 affect check writers in the following ways:

  • You may be getting a “substitute” check. A substitute check is a high-quality paper reproduction of both sides of the original check. A substitute check is a legal equivalent of the original check.
  • Checks are processed electronically and faster.
  • Check 21 ensures that you have the same legal protections when you receive a substitute check from your bank as you do when you receive an original check.
  • If you notice a problem with a substitute check, you should contact your bank as soon as possible. Check 21 provides a special process that allows you to claim a refund when you receive a substitute check from a bank and you think there is an error because of the substitute check. In general, you should contact your bank no later than 40 days from the date your bank provided the substitute check or from the date of the statement that shows the problem.

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