In October 2003, the Check Clearing for the 21st Century Act became law. Now known simply as Check 21, the legislation’s goals include “to improve the overall efficiency of the nation’s payments system.”

Previously, most checks needed to be physically transported—whether across town or across the country—before they could be cleared. This is expensive and time-consuming. Check 21 provides a new option: legal acceptance of paper reproductions of original checks. This reproduction is called a “substitute check” and is produced from a digital image of the original check.

As of Oct. 28, 2004, every bank is required to accept substitute checks, just as they accept your original paper checks. If you receive your canceled checks or electronic images of your canceled checks with your account statement, you will see substitute checks. A substitute check is the legal equivalent of the original check and will include all the information contained on the original.

For additional information about Check 21, read this flyer (Adobe Acrobat format) from the American Bankers Association.