Return to Check 21 Substitute Checks

Check 21 Substitute Checks

The Check 21st Act is a landmark legislation that will take effect beginning October 28, 2004, and was enacted due to the transportation issues following 9/11. The new law revolutionizes the check processing procedure by creating a new negotiable instrument called a substitute check which will permit quicker processing of checks by allowing the receiving financial institutions to treat an electronic image (substitute check) the same as the check itself. The substitute checks will contain all the information on the original check and will be the legal equivalent of the original check.

The first step in creating a substitute check is to create an electronic image of the original check. Once an electronic image is created, the original check is "truncated," or taken out of circulation. The substitute check can then be transferred electronically rather than transporting it via truck, train or plane. Check 21 is designed to help reduce the cost of transporting checks - an expense that was costing billions of dollars a year.

Accelerated check processing by the creation of a substitute check also means a reduction in the "float" time - the amount of time between the writing and the cashing of a check. You may begin seeing substitute checks if you request a copy of a check or when you view your cleared checks online through eTeller. If you have any questions about this new legislation, please talk to a Member Services Specialist at any HFCU office.
  1. An image of the original check appears in the upper right-hand corner of the substitute check.
  2. A substitute check is the same size as a standard business check.
  3. The information in asterisks relates to the "reconverting back" - the financial institution that created the substitute check.
  4. The information in brackets (appears sideways facing check image) relates to the "truncating back" - the financial institution that took the original check out of the check processing system.
  5. The Legal Legend states: This is a legal copy of your check. You may use it the same way you would use the original check.
View Sample Image
If you have any questions please feel free to call HFCU at 1-866-OUR-HFCU or (281) 243-0500. You can also request information online or stop by and enjoy some free coffee while we talk.
This credit union is federally insured by the National Credit Union Administration

©2004 Houston Federal Credit Union

Powered by [tt]trabiantechnology.
Return to Check 21 Substitute Checks