Do financial institutions need to change their Deposit Agreements or Contracts for new customers? What about for existing customers?
No. Check 21 does not require an institution to modify its Deposit Agreements or Contract. However, an institution may want to consider amending its deposit agreements to include the required consumer awareness notice and to address and allocate risk with respect to the creation of substitute checks by corporate customers. Under the act, when a person who is not a bank creates a substitute check, the first bank that transfers or presents the substitute check (or the first paper or electronic representation of that substitute check) is the reconverting bank and, therefore, is the first bank to make the warranties and indemnity under Check 21.
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