What is Check 21?

Check Clearing for the 21st Century Act

The "Check Clearing for the 21st Century Act", better known as Check 21, is a federal law which impacts all financial institutions, not just VIST Financial.  Check 21 makes it easier for financial institutions to electronically transfer check images instead of physically transferring paper checks.

Check 21 established what is known as a "substitute check".  Substitute checks are special paper copies of the front and back of your original checks which were created to replace the original check. A substitute check has the same legal standing as an original check and can be processed in the same manner as an original check. The goal of Check 21 is to reduce paper, combat fraud and streamline how checks are processed through the banking system.

The purpose of Check 21:

• To encourage financial institutions to use image presentment of checks by allowing a substitute check to replace the original check;
• To foster innovation in the check collection system without requiring that financial institutions receive all checks electronically;
• To improve the overall efficiency of the United States payments system

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