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What is Check 21?
- "Check 21" is a shortened version of a new Federal law called "Check Clearing for the 21st Century Act," which went into effect October 28, 2004.
- The purpose of the law is to make the processing of checks and payments more efficient.
- The law enables banks to take a picture image of a check. The image is then used as a substitute for the check with the same legal standing as the original paper check.
- Check 21 is intended to reduce the check payment system's dependence on the physical transportation network (trucks, trains, or airplanes) and streamline the collection and return process for checks.
- The legislation allows banks to clear paper based transactions as either:
- The original physical check
- An image of the original check
- A reproduction of the digitized image of the check
How are substitute checks created and who creates them?
- Any bank handling the check during the collection/return process may create a substitute check.
- ATMs and merchant payment acceptance equipment can be set up to create an image document for processing.
 What does a substitute check look like?
Substitute checks carry the same key information (minus certain paper-based security features) of a standard paper check. Here is an example of a substitute check.
How does the law affect consumers and businesses?
- You may see checks clear your account faster and your deposited checks become available more quickly.
- If you receive your paper checks each month, you may have substitute checks in place of the original checks.
- If you receive image statements, you may see images of the original check or of substitute checks.
- Both businesses and individuals must accept substitute checks, as part of the routine check clearing process. Neither businesses nor individuals may opt out.
What is Commerce Bank doing?
Commerce stays abreast of changes and works to make the new processes as seamless as possible for all its customers.
Future advances in the way check images are captured allows banks like Commerce to offer customers better, faster services such as lockbox, ATMs converting checks to images, and merchant acceptance services that allow even small businesses to create substitute checks at time of payment acceptance.
For more information, visit these other resources on the web:
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