Check
21 became effective on October 28, 2004.
Check 21 is a federal law that is designed to enable
banks to handle more checks electronically, which is
expected to make check processing faster and more efficient.
Check 21 will increase the speed with which checks are
cleared between banks. Make sure your checking account
has enough money in it to cover the initial investment
or deposit on the purchase of your new home. You will
not have the same amount of time to “cover a check”
because the end result of Check 21 will be a virtual
check clearing. The “float” as we have known
it is eliminated with Check 21. Checks received by a
depositing institution will be electronically scanned
and the images will be transmitted to the drawing institution.
The actual check never reaches the drawing institution.
Under Check 21, banks are required to provide a disclosure
to their consumer customers who receive canceled checks
with their monthly statements. The disclosure describes
substitute checks and consumer rights regarding substitute
checks. Banks must provide this disclosure to existing
customers not later than the first statement mailing
after Check 21 becomes effective on October 28, 2004.
Contact
us for more info on CA and Check 21
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