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What is Check 21?

The Check Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law, Pub.L. 108–100, that was enacted on October 28, 2003, by the 108th U.S. Congress. The Check 21 Act took effect one year later on October 28, 2004. The law allows the recipient of the original paper check to create a digital version of the initial check, a process known as check truncation, into an electronic format called a “substitute check,” thereby eliminating the need to further handle the physical document. In essence, the recipient bank no longer returns the paper check, but effectively e-mails an image of both sides of the check to the bank it is drawn upon.

Consumers are most likely to see the effects of this act when they notice that certain checks (or images thereof) are no longer being returned to them with their monthly statement, even though other checks are still being returned. Another effect of the law is that it is now legal for anyone to use a computer scanner or mobile phone to capture images of checks and deposit them electronically, a process known as a remote deposit.

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