Check Clearing for the 21st Century Act

About

The Check Clearing for the 21st Century Act (Check 21) was signed into law on October 28, 2003. Check 21 became effective on October 28, 2004. Check 21 is designed to encourage change in the way banks process checks. It is also designed to improve productivity by reducing some of the delays caused by check truncation. The law assists check processing through check truncation by creating a substitute check, which permits banks to convert original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks. A substitute check is the legal substitute of the original check. It includes all the information contained on the original check. The law does not require banks to accept checks in electronic form. Nor does it require banks to use the new authority granted by the act to create substitute checks. Read more…

FAQs

For frequently asked questions on Check 21, please visit the Federal Reserve Board’s website.

Substitute Check Example