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What Check 21 Could Mean To You
Although Check 21 took effect for financial institutions in October 2004, not all consumers and businesses saw changes immediately. Some financial institutions were early adopters of the new check imaging technologies, and others implemented changes more gradually and customers are only recently experiencing the effects of Check 21.
For Financial Institutions
Because financial institutions were required to accept substitute checks from another bank or credit union, Check 21 affected every financial institution in one way or another. Financial institutions had to understand and adapt to these regulations and requirements, and make the necessary adjustments to their check processing systems.
Check 21 priorities included:
- Educating employees and customers about Check 21
- Preparing internal check operations to receive or accept substitute checks
- Communicating with customers about their protections under Check 21
- Planning for the future on how Check 21 could be implemented
- Maintaining security and monitoring risk as processing changes are implemented.
For Consumers
With Check 21, consumers won’t see a difference when they write checks, but they’ll notice the effects of processing changes under Check 21:
- Checks clear faster. For example, a check deposited in New York from a bank in Los Angeles may be posted in a matter of hours rather than days.
- With faster check clearing, financial institutions may be able to detect fraud faster.
- Consumers have more options in viewing bank statements electronically.
For Businesses
Check 21 does not require businesses to change the way they make deposits or accept checks from customers. All checks drawn on U.S. financial institutions are eligible for electronic processing with Check 21. Changes businesses may see include:
- A faster return and collection of checks.
- Quicker access to revenue from customers who pay by check.
- Alternatives for returning checks in monthly statements, providing options for secure storage of images or substitute checks.
- Some financial institutions will use Check 21 as an opportunity to promote new services or deposit options designed for businesses.
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