Effective October 28, 2004, under a new Federal Law known as Check 21 (The Check Clearing for the 21st Century Act) a new instrument will be introduced, a substitute check A substitute is a copy of a check that you wrote and under this legislation will be regarded as the original check. The main goal of Check 21 legislation, which was passed into law in October 2003, is to improve the overall efficiency and security of the nation's payment system.

Check 21, which is the most sweeping change in check processing in decades, promises to usher in a new era of banking efficiency and service. This new efficiency will have significant benefits:

• Checks will clear faster, making your account's balance more accurate.
• Fraud will be reduced, because as checks clear faster, banks will be able to identify fraudulent items sooner and minimize customer inconvenience.

For more information, you may stop at one of our branches and request a Check 21 brochure.

Frequently Asked Questions

If my check is scanned, what happens to my original check?
The original paper check is removed from the check collection or return process and an electronic image of the item is transmitted in lieu of the original item. The original check is then destroyed.

Can I obtain a copy of my check and will there be a fee for the check copy?
You will be able to receive a special kind of copy of the check called a "substitute check" or image replacement document (IRD). The substitute check or IRD will be treated the same as the original check under state and federal law. There may be a fee to re-produce a copy of a substitute check, just as there may be a fee to order past copies of your monthly statements.

Will the substitute check or IRD look just like my original check?
This document will contain the scanned image of the front and back of your check along with some legal encoding to verify its authenticity.

What will happen to my original check after the imaging process?
The institution that converts your check to an electronic transaction will destroy the check.

What happens if there is an error when converting to a substitute check?
If there is an error relating to a substitute check or IRD, there is a process by which you will be able to get a re-credit for any disputed funds for 10 days (up to $2,500 for each disputed check). This will give the institution time to resolve the matter, but allow you access to your funds during that time. The consumer re-credit rights will be explained in a notice provided to existing customers and to new account customers.

How long will it take for my check to clear under the Check 21 Act?
Currently checks take an average of 1.2 days to clear. This is based on 80% of checks being cleared in one day, and the remaining 20% being cleared the second day -for instance when checks have to be transported across the country. Industry experts predict that most clearing will be one day in a post-Check 21 environment.

If my check clears faster, will I gain access to my deposits sooner?
No. The legislation does not necessarily affect the hold times placed on deposited items. However, it does mean that the actual funds will make their way through the system quicker and will reduce the time that you'll wait for checks to clear.

What if I want to get my original checks back? Can I 'opt-out' of Check 21?
The Check 21 Act mandates that banks accept substitute checks or IRDs in lieu of the original check. So individuals, or banks for that matter, can't choose not to participate.

What if I have a legal case and I need to present a paid check?
A substitute check or IRD is the legal equivalent of a check and subject to check law. It is subject to the standards outlined in the UCC (Uniform Commercial Code), part 229 of Title 12 of the Code of Federal Regulations, and other applicable state or federal law "to the extent such provision of law is not inconsistent with this Act."

Is there a way to tell which bank converted my check to a substitute check or IRD?
Banks are required to identify themselves as the "reconverting bank" (the one that created the substitute check or IRD) so as to preserve any previous bank identifications. This will either be indicated 0 n the substitute check (IRD) or may be obtained by contacting your bank.

Are there any web sites that provide more information on Check 21?

• BAI's Check 21 Resource Center: http://www.bai.org/check21 -Bank Administration Institute (BAI)'s web site devoted to feature articles, publications, news alerts, press releases, presentations, white papers, etc., on the topic of Check 21.
• Federal Reserve Check 21 Site: http://www.frbservices.org/Retail/Check21.html -Federal Reserve Bank's public location for Check 21 developments.
• ECCHO: http://www.eccho.org -The Electronic Check Clearing House Organization provides several Check 21 documents, including the history of the act and various regulations.