AEC - AutomatedElectronicChecking

FAQ:

Check21 (RCC)

What is Check21 and what is its basic purpose?

Check21 is a federal law that is designed to enable banks to handle checks electronically which will make check processing faster and more efficient. Today, banks physically move original paper checks from the bank where the checks are deposited to the bank that pays them. This transportation can be inefficient, costly, and can introduce errors into the check handling process. Check21 became effective in October 2004.

How will Check21 make check processing more efficient?

Instead of physically moving paper checks, Check21 will allow banks to process checks electronically. Banks can capture a picture of the front and back of the check along with the associated payment information and transmit this information electronically. If a receiving bank requires a paper check, the bank can use the electronic picture and payment information to create an actual paper check. This process enables banks to reduce the cost of physically handling and transporting original paper checks.

Is electronic check processing secure?

Electronic check processing is not new to the financial industry. It is a safe and reliable way of processing payments. It uses existing technology to process your check information securely.

What changes can I expect as Check21 goes into effect?

Since October 28, 2004, you may receive a substitute check instead of the original check. If you receive cancelled checks with your account statement, you could receive a mixture of cancelled original and substitute checks. If you receive image statements, you also may notice that some of the pictures are of substitute checks.

Will Check21 result in my check being paid sooner?

With Check21, banks will likely process more checks electronically. As a result, over time your checks will reach your bank faster and be paid sooner.

Will Check21 affect how quickly I receive funds from the checks that I deposit with my bank?

The Expedited Funds Availability Act specifies the maximum time periods by which your bank must make funds available. With Check21, the banks will be able to process checks more quickly and accurately.

What is the difference between Check21 and programs that convert checks to electronic payments?

Under electronic check conversion, the check is used only as a source of information to create an electronic fund transfer and is not processed as a check. You must receive notice that your check may be processed this way. Electronic fund transfers are governed by different laws and have different consumer rights than check payments. Checks processed under the Check21 law are treated the same as paper checks.