Check Clearing for the 21st Century Act passed in October of 2003. The
impact to you, the consumer, will be felt beginning on October 28,
2004, when the way in which banks process checks will change -- the
biggest change to check processing in 50 years.
Mercer County State Bank is poised to assist our clients through this
transition by answering your questions and concerns, providing
alternative products and services to check writing and processing, and
keeping you up to date on the latest news about Check 21.
Get answers to the most commonly asked questions about Check 21 (see
how Check 21 could effect you
Understand the events that lead up to Check 21
Discover how check imaging will impact check processing
"Substitute Checks and Your Rights" (this document is intended
to be printed).
FAQ - Check 21
October 28, 2004, a new law known as Check 21 will go into effect to
improve the overall efficiency of the nation's check payment system by
eliminating the need to physically transport paper checks between
banks. Mercer County State Bank would like to help familiarize you
with how Check 21 will improve the way banks process checks.
What is Check
Simply stated, Check 21 legislation allows banks to replace original
paper checks with substitute checks that are made from digital images
of the originals.
Why was Check 21
21 was created to reduce the time, risks and costs associated with
paper check processing and transportation. Traditionally, banks rely
on physical transportation -- such as planes and trucks -- to deliver
checks between banks for payment.
Check 21 allows original paper checks to be removed from the
collection process and be replaced with substitute checks/Image
Replacement Document (IRD) created from digital image files. Banks can
send check images electronically, reducing dependence on
transportation that can be impacted by uncontrollable delays, such as
weather or natural disasters.
Check 21 do?
21 streamlines and improves check processing without requiring
customers to change the way they write checks. It simply requires
banks and customers to accept paper reproductions of original checks.
These reproductions are called substitute checks or IRD.
What is a
substitute check/IRD is created by a bank and is a paper reproduction
of a digital image of an original check. The substitute check/IRD
contains an image of the front and back of the original check
and conforms to banking industry standards for quality. It is called
an Image Replacement Document (IRD).
What does a
substitute check/IRD look like?
is an example of a substitute check/IRD.
Remember a substitute Check/IRD is a paper reproduction of an original
paper check. A MICR line containing all the information on the MICR
line of the original check makes it suitable for automated processing
in the same way as the original. It includes the legend: This is a
legal copy of your check. You can use it the same way you would use
the original check.
Do I have to
accept substitute checks/IRDs as proof of payment?
Once a paper check is converted into a substitute check/IRD, it
becomes the legal equivalent of the original paper check. Any bank or
person must accept them as if they were the original checks.
Which checks are
eligible to become substitute checks/IRDs?
checks are eligible for conversion to a substitute check/IRD
including, but not limited to, consumer checks, money orders and
What happens to
my original check?
there are no requirements governing the retention of original
checks, they may be destroyed once digital images of the original
checks have been made. A substitute check/IRD made from the digital
image becomes the legal substitute for proof of payment.
Am I allowed to
'opt out' of Check 21?
Once Check 21 legislation goes into effect in October 2004, it will
apply to all financial institutions and their customers. There will be
no "opt out" exceptions.
When will I
encounter substitute checks/IRDs under Check 21?
October 28, 2004, you can expect the following:
If you receive
cancelled checks with your Mercer County State Bank statement, you
may receive a combination of your original cancelled checks and some
If you have check
safekeeping and your cancelled checks are stored at Mercer County
State Bank, images of substitute checks/IRD may be stored in place
of the original checks.
If you have online
access to your account transactions, images of your checks and
substitute checks/IRDs will be available for viewing.
What other impact will Check 21 have on me?
Check 21, checks will be processed more quickly, which may result in
funds being withdrawn from your account sooner than in today’s