WHAT HAPPENED TO MY CHECK?
How new check processing regulations affect you
Effective October 28, 2004, the “Check Clearing for the 21st Century Act” – or “Check 21” will bring the nation’s check payment system into the digital age by eliminating the need for financial institutions to physically transport paper checks for payment.
Here’s what to expect:
- Reduced float: With Check 21, checks may be processed more quickly, which may result in funds clearing your account faster than in today’s environment.
- New substitute checks: Financial institutions may convert paper checks into a “substitute” or digital picture of the original check. Substitute checks are the legal equivalent of paper checks. Click here to view an image of a substitute check.
- Check images: Some of the check images you view in Online Banking may be framed in a border that includes information about when the check cleared and the language “This is a legal copy of your check.”
Here are answers to questions you may have:
Why was Check 21 created?
More than 40 billion checks are physically transported between banks each year. Check 21 will reduce the time, security risks and costs associated with paper check processing and transportation.
What does Check 21 do?
Check 21 allows financial institutions to replace paper checks with digital images of the front and back side of the originals.
Can I opt out of Check 21?
No. Once Check 21 goes into effect in October 2004, it will apply to all financial institutions and their customers/members.
Which checks can be converted to substitute checks?
All checks are eligible for conversion to a substitute check, including consumer checks, money orders and travelers checks.
Are there other check processing changes which may affect me?
Yes. You may have already encountered retailers which immediately convert your check into an electronic transaction at the point of purchase. This happens when the cashier swipes your check through a device to capture account information and clear the check for payment. The cashier then hands your voided check back to you.
Other times, when you mail a check to pay a bill, such as a utility or insurance bill, the company will convert your check into an electronic transaction. LFCU has no control over this practice. When this happens, your LFCU statement will show the cleared check information in both the “Summary of Cleared Checks” and the “Detailed Transactions” areas of your statement.
Also, because your paper check was converted into an electronic debit, it is not possible to view an image of the cleared check in Online Banking or to request a paper copy of the cleared check.
If you have questions about the new check clearing trends, please call (800) 328-LFCU.
