Suzi McGarvey, Extension Associate,
Consumer and Family Economics, College of Human
Environmental Sciences, University of Missouri Extension
The Check Clearing for the 21st Century Act, also known simply as Check
21, became a law in October 2003. The aim of the law was
to increase the “efficiency of the nation’s payments
In the past, most checks had to be physically delivered to a bank
before they could be cleared. Because some checks had to
be routed to various places across the country, this
process was expensive and time consuming. Using a
digital image of the original, banks now can reproduce
your check. The reproduction is called a “substitute
If you normally get your canceled checks (or electronic copies) from your bank, you may have already received substitute checks instead of your original check. You can use this substitute in the same way you would a canceled check, such as for proof of a purchase.
These substitute checks have allowed for
faster check clearing, which in turn can decrease fraud.
They have also allowed banks to decrease the amount of
paper they use and have increased security.
For consumers, the period of "float" (the time before your check amount
is subtracted from your bank balance) has been
shortened, so it takes greater care to avoid bounced
checks. Float may not get you through if you are used to
writing checks on an empty account a couple of days
before payday—the checks may bounce and result in added
Banks are required by law to accurately copy your check. If they make
an error, banks must refund your account in the amount
of their mistake along with any fees (such as bounced
check fees). If your account bears interest, you may
also recover any lost interest.
If you feel your bank made an error, contact them as soon as possible.
You often must report mistakes within 40 calendar days
from when the substitute check was mailed to you to be
guaranteed an adjustment.
American Bankers Association, Checks Are Changing, Financial Education Corporation, 2004.
American Bankers Association, Substitute Checks and Your Rights,
Financial Education Corporation, 2004
Federal Trade Commission, Check 21: Substitute Checks, Electronic Processing and What it Means to You, June 2005, http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre37.shtm
Last update: Tuesday, May 05, 2009