How does the Check Clearing for the 21st Century Act (“Check 21”) affect the check clearing process?
Effective October 28, 2004, a new federal law called the Check Clearing for the 21st Century Act, or “Check 21,” began to change the way your checks are processed for payment. Check 21 speeds up how checks are cleared through the banking system as banks no longer have to transport original checks. Under Check 21, Bank of America, or any other bank or financial institution, may process your check and replace it with a copy made from a digital image of the original — a “substitute check.” Banks will now be able to exchange these substitute checks to expedite the check clearing process. Due to this increased efficiency, your checks may be processed faster and “clear” sooner, so be sure to have sufficient funds in your account before writing a check. In addition, some of the images of your checks contained in your statements may look different than others as they may be images of the “substitute check.
Effective October 28, 2004, a new federal law called the Check Clearing for the 21st Century Act, or “Check 21,” began to change the way your checks are processed for payment. Check 21 speeds up how checks are cleared through the banking system as banks no longer have to transport original checks. Under Check 21, Countrywide Bank, or any other bank or financial institution, may process your check and replace it with a copy made from a digital image of the original — a “substitute check.” Banks will now be able to exchange these substitute checks to expedite the check clearing process. Due to this increased efficiency, your checks may be processed faster and “clear” sooner, so be sure to have sufficient funds in your account before writing a check. In addition, some of the images of your checks contained in your statements may look different than others as they may be images of the “substitute check.
