Banks across the country have begun processing checks in a new way under the federal government’s Check 21 law. Up until now, banks used original checks for processing. Check 21 requires banks to accept “substitute checks” for check processing. This affects both you in several important ways:

What are the main effects of Check 21?

• Customers who receive their cancelled checks in their statements will begin to receive substitute checks in place of some or all cancelled checks. Whether the customer receives a cancelled check or a substitute check will depend upon the bank where the check is cashed or deposited. Once a bank creates a substitute check, the original check will be destroyed.



• Substitute checks are a legal copy of the original check, and can be used as proof of payment. Substitute checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check will read “This is a legal copy of your check. You can use it in the same way you would use the original check.”



• Checks will clear sooner. Customers face an increased risk that a check will bounce if funds are not in the account when the check is written. The “Float” associated with processing checks will be greatly reduced. This is because banks can electronically transmit substitute checks to one another for processing instead of transporting the actual checks between banks.

For more information on the Check 21 law, read the Substitute Checks & Your Rights brochure.