Personal Banking: What You Need to Know About the Check 21 Act
When it comes to personal banking, it’s important to know how the Check 21 Act impacts your finances. As a result of this act, federal law allows financial institutions to use substitute checks as a legal representation of your cleared checks.
In other words, some of your paid checks may be handled in a different manner. When you receive your canceled checks in your monthly statement or access your banking records online, some checks may look different. These substitute checks are legal documents that you can use as proof of payment for your personal banking.
Substitute checks carry the same rights and obligations as your original checks. They’reabout 8.5 inches wide and similar in size to a standard business check. Substitute checks are paper copies created from electronic images of the front and back of original checks.
In addition, they include all endorsements and a legal statement that reads “This is a LEGAL COPY of your check. You can use it the same way you would use the original check.” It’s important to distinguish these substitute checks from the typical check image statements you may receive.
After digitizing your original check, banks typically destroy it. Given substitute checks are legal alternatives, the law does not require financial institutions to retain original checks.
By allowing banks to use these substitute checks, the collection process improves personal banking by automating procedures previously done manually. Checks are cleared and posted faster and easier. The depositing bank will decide which checks get converted to substitute checks.
So, What Does Check 21 Mean for My Personal Banking?
If you receive your cancelled checks with your monthly statement, you may not receive your original check back in some instances. Instead you may receive a substitute check in place of an original. And, if you don’t receive your cancelled checks with your monthly statement, your financial institution can provide a check copy upon request.
Check 21 can improve your financial management and personal banking by clearing your checks sooner. Weather, transportation and other delays no longer will be an issue. You won’t have to wait as long for your outstanding checks to be deducted from your account. Just make sure you don’t write checks before you have enough money in your account to cover them!
For any errors involving substitute checks, the Check 21 Act requires your financial institution credit your account with 10 business days if you file a dispute. Any errors regarding substitute checks must be reported as soon as possible to your bank. In general, errors can be resolved quicker in disputed situations and help improve your personal banking.
In addition, you won’t have to use excess storage space for cancelled checks. Instead, you’ll have online access to check images and statements. Some banks provide image statements as a convenient option. You’ll receive images of each check written in your monthly statement that are easier to file than your original canceled checks.
The Check 21 Act opens the doors for you to explore many personal banking account options offered by your financial institution. Without the need for canceled checks with your statement, you can take advantage of duplicate checks that provide a carbonless check copy and debit cards that eliminate the need to carry a checkbook.
Of course, online personal banking provides an efficient and convenient way to pay bills and other expenses. In addition to scheduling bills online, you’ll have around-the-clock access to routine personal banking tasks, such as setting up automatic recurring payments, accessing statements and viewing your banking history.
Bret Pippen is a contributing editor and is the head of advertising and customer communications for Regions Bank, one of the nation’s largest full-service providers of consumer and commercial banking products and services. Learn more about personal banking by visiting http://www.regionsbanknews.com.
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