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Check 21 |
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September 1, 2004 |
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What is Check 21?
The Check Clearing for the 21st Century Act, commonly
known as Check 21, is a new federal law that becomes
effective on October 28, 2004. It was designed to foster
innovation in the country's check clearing system and
improve the overall efficiency of the U.S. payment system.
It also supports the creation of a new document called a
Substitute Check or Image Replacement Document (IRD).
Under state and federal law, a Substitute Check is the
legal equivalent of the original paper check, and can be
used in the same way.
What is a Substitute Check?
A Substitute Check is a paper reproduction of an
electronic image of an original paper check. It is a legal
replacement for the original check. A substitute check
will contain the same information as the original check.
It will contain an image of the front and back of the
original check, all endorsements that were on the original
check, and a MICR line that includes all the information
from the original check. It will also bear a legal
equivalence legend that states, “This is a LEGAL COPY of
your check. You can use it the same way you would use your
original check.”
Click here to view a sample of a
substitute check.
How Check 21 May Affect You
As a Wood County National Bank customer, you will continue
to write checks as you normally do. If you receive images
of your checks with your bank statement, you may start to
see a combination of images of original checks and
substitute checks on your bank statement. Also, if you
deposit a check and it is returned to you as unpaid, you
may receive a substitute check in place of the original.
Float Will Disappear
Some of the checks you write may be processed more
quickly. More rapid processing of checks will mean less
float…the time between when a check is written and when it
clears. As always, you will want to be sure there are
adequate funds in your account when checks are written to
avoid potential problems.
What Can I Do To Manage My Accounts More Easily?
Wood County National Bank offers Free Online Banking and
Telephone Banking to help you monitor your balances and
transfer funds 24 hours a day. You can also receive e-mail
alerts when your checking account falls below a balance
level you have selected. With Direct Deposit of your
paycheck or Government Check, you can ensure that deposits
are made as quickly as possible. And you can protect
against the problems of an overdrawn account with WCNB’s
overdraft protection plans.
Other Electronic Payments
You may already have experienced two other types of
electronic payment known as “check conversion”. These
payment methods use the Automated Clearing House “ACH”
system to convert your check to an electronic debit.
In the first example, a merchant converts a paper check
into an ACH payment at the point of purchase. In this
situation, the store clerk converts the check into an
electronic payment and returns the original check to you.
This electronic check will be listed in the Debits section
of your statement and will be identified as an
“Electronified Check”.
In the second example, regular billers ( i.e. utilities
and credit card providers) convert your check payments
into ACH payments. The check has been converted into an
electronic format and you don’t receive an image of the
original check. This payment will also be listed in the
Debits section of your statement as an “Electronified
Check”.
Both of these example transactions are different than
Check 21 and substitute checks. However, all of these
methods of processing payments allows for faster payment
processing and better service for customers.
Frequently Asked Check 21 Questions
Q: How will the Check 21 law affect me?
A: Generally, it will have no impact on the way you
write or use checks. However, if a check you deposited to
your account is returned unpaid, you may receive a
Substitute Check which looks different than the original
check, but is the same for all legal purposes.
Q: What will a Substitute Check look like?
A: In many ways, the Substitute Check looks like
the original paper check. The size of the Substitute Check
will be similar to the size of a business check; it will
always contain the same information as the original check
and it will show the front and back of the check,
including endorsements. It will contain the following
wording on the left side of the document: “This is a legal
copy of your check. You can use it the same way you would
use the original check.” The appearance of each Substitute
Check may vary slightly depending on the type of equipment
used in the processing.
Q: Will I still be able to get my check images with my
statement?
A: Customers with accounts who currently receive
check images with their statements will continue to
receive check images – but some or all of these items may
be images of Substitute Checks.
Q: What happens to my original checks?
A: In many cases, banks will continue to process
and clear checks just as they have in the past. However,
banks that convert checks to Substitute Checks will most
likely destroy the original paper checks shortly after the
Substitute Check has been created.
Q: How do I get a copy of a check I’ve written?
A: You can follow the same steps you do today. Just
visit any WCNB location, or call the phone number on your
statement, and we’ll be happy to assist you in getting
copies of the checks you need.
Q: If I deposit a check that is written to me and it is
returned to me unpaid, will I get the original check back?
A: You will receive either the original check or
the Substitute Check. Remember, the Substitute Check is a
legal document and can be used the same way as the
original check.
Q: Will the checks I write and deposit clear faster
than they do today?
A: Over time, checks that you write may clear
faster, checks you deposit may clear faster, and
notification of checks you deposited that are returned may
occur more quickly, too. It will be increasingly important
to have funds on deposit before you write a check to avoid
overdrafts.
Q: Can I refuse to accept Substitute Checks?
A: No. This new law requires everyone (banks,
customers, businesses, government agencies, etc.) to
accept a properly prepared Substitute Check as if it were
the original check.
Q: What if I have other questions about Check 21?
A: If you have additional questions on Check 21 and
how it affects you, call 715-423-7600, or visit us at any
of our offices.
Related Links
Substitute Checks and Your Rights
(WCNB Disclosure Brochure)
Federal Reserve Consumer Guide
By selecting to browse the above sites you may be leaving
the Wood County National Bank site and may be taken to a
third party site that may offer a different privacy policy
and level of security. Wood County National Bank does not
guarantee the products or services offered by these web
sites. |
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