Check 21 Update

TORONTO, CANADA (October 15, 2004) - The Check Clearing for the 21st Century Act, also known as Check 21, was enacted on October 28, 2003, and became effective on October 28, 2004. The Check 21 Act authorizes a new negotiable instrument called a "substitute check" and provides that a properly prepared substitute check is the legal equivalent of the original check for all purposes. A substitute check is a paper reproduction of an original check that contains an image of the front and back of the original check and can be processed just like the original check.

The Check 21 Act does not require any bank to create substitute checks or to accept checks electronically. However, by requiring banks to accept substitute checks as they would the original check, Check 21 is expected to facilitate the use of electronic check processing without mandating that any bank change its current check collection practices.

Follow the industry links for access to more Check 21 information:

Federal Reserve Release December 22, 2003
Federal Reserve Documents
Federal Reserve Check 21 FAQ
BAI Check 21 Resource Center
ECCHO Check 21 website

Read the Check 21 Act

Creditron's Check 21 Advantage

Creditron’s industry leading remittance and lockbox solutions have always incorporated innovative image processing technology, and have for some time been used for ACH conversion of checks either directly to the deposit bank, or through one of our ACH partners. Similarly, Creditron's advanced technology facilitates inline Check 21 truncation and creates required files which may be sent directly to the deposit bank, or through our partner network for electronic clearing and IRD production. Using remote capture and remote deposit, Creditron’s clients are able to maximize the emerging opportunities with electronic check conversion and truncation, and Creditron's decision logic will automatically select the most efficient method of check electronification at the point of processing.