Check 21 Act

What You May Need to Know

   The Check 21 Act is legislation that took effect October 28, 2004.  In summary, the act will allow banks to replace original paper checks with substitute checks that are made from digital copies of the originals.  Check 21 does not mandate electronic processing of digital check images.  It simply makes it possible.  For banks that choose to process checks manually, a substitute check will be made of the image, which will be processed as if it were the original.

Why was Check 21 created?

• Check 21 was created to reduce the time, risks and costs associated with paper check processing.

• Currently, checks travel on trains, planes and automobiles during the clearing process.  When Check 21 becomes effective, banks will be able to send digital images of checks electronically, eliminating the need to physically transport paper checks between banks.  Check 21 will also reduce uncontrollable transportation delays that can be caused by weather or natural disasters.

What is a substitute check? 

• A substitute check is a paper copy of the digital image of your original check—both front and back, with all endorsements—and is about the size of a business check.  Check 21 legislation sets standards for quality and allows for substitute checks to be legal copies of the originals.  All banks must accept the substitute check as they would the original document.

How will Check 21 impact me?

• If you receive your canceled checks with your statement, you may receive a mix of substitute checks and original checks.  If you don’t receive your checks back today, you may not notice any change at all.

• Check processing will be faster with the implementation of Check 21.  Funds may be removed from your account sooner than in today’s system, therefore there will be less “float time.”  As always, make sure you have enough money in your account before writing a check.

What happens to my original check?

• After taking a digital image, the bank may destroy your original check.  If necessary, a substitute check may be created.  Since substitute checks are legal copies of your original check, there is no need to save the original. 

What if I need a copy of my canceled check?

• Contact Baylake Bank.  They will produce a copy for you.  Canceled checks may also be viewed (up to a period of time) on eBanc, Baylake Bank’s internet banking service.  Contact Customer Service to sign up.

How will I benefit with Check 21?

• You may have earlier access to your funds and faster, more convenient access to information about your checks—such as online images.

• You’ll have better fraud protection.  Faster processing means faster detection and faster resolution.

• If you detect a problem because of a substitute check, Check 21 requires that the bank recredit your account, pending an investigation.

• Why was Check 21 created?
• What is a substitute check?
• How will Check 21 impact me?
• What happens to my original check?
• What if I need a copy of my canceled check?
• How will I benefit with Check 21?