Check 21

In October 2003, the U.S. Congress passed the Check Clearing for the 21st Century Act, commonly known as Check 21. The goal of this federal legislation is to improve the nation's check payment system and the way banks process checks. Check 21 allows banks to create and transmit electronic images of checks (through secure means) instead of physically transporting the pieces of paper from one bank to another. The electronic image can then be used to create a printed image of the original check, called a substitute check and this substitute check is the legal equivalent of the original and in fact, replaces the original. Why do we care? Because it is a revolutionary new step for banks and the processing of payments via electronic images. Why do you care? Because all financial institutions must comply with this federal law. While some substitute checks may vary in resolution, all substitute checks (front and back) must adhere to industry standards.