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Business Banking
Check 21
The Check Clearing for the 21st Century Act,
commonly referred to as Check 21,
went into
effect on 10/28/2004. This new federal law allows for
changes in the way checks can be
processed in the United States. The federal law
implements a means of streamlining the
nation's check processing system and reduces the time
and cost associated with the physical
transportation of paper checks.
Check 21 reduces the
vulnerability of the check payment
system to disruptions, such as weather, natural
disaster or disruptions in air or ground
transportation.
Check 21
also allows banks to create a "Substitute Check" from an electronic
image of the
original check. However,
THE BILTMORE BANK OF ARIZONA
does not currently create
"substitute checks" at this time. A "substitute check"
is the legal equivalent of the original
check and will include all the information contained on
the original. Over time, Check 21
is
expected to bring efficiency and improve the security
of the nation's payment system.
Check 21- Frequently Asked Questions for Individuals and Commercial
Customers
Why was Check 21 passed?
Congress created Check 21
to foster a more improved overall efficiency of the check and
payment system. Currently, when you write a check and
it is deposited at another bank, the
check is transported by truck and/or airplane between
the banks in order to be paid. These
methods make the nation's payment system vulnerable to
numerous risks including delays
and losses.
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How will the Check 21 law affect me?
In general, it will have minimal impact on
THE BILTMORE BANK OF ARIZONA
customers.
You will continue to write and use your checks the same
way. If a check you deposited to
your account is returned unpaid, you may receive the
original or a "substitute check" which
will look different than the original, but is the same
for all legal purposes. (Click here
to view a
sample "substitute check.")
What exactly is a "substitute check"?
A "substitute check" is a new legal document that contains a digital
image of the front and
back of the original check and will include a legal
equivalency statement, "This is a legal copy
of your check. You can use it the same way you would
use the original check". "Substitute
checks" must be accepted as proof of payment. Banks do
not have to create "substitute
checks" but they are required to accept them.
Is "check conversion" the same as "substitute checks"?
You may have already experienced the payment practice of "check
conversion". A retailer
converts your paper check into an electronic payment at
the point of sale. After presenting
your check for payment, the check is handed back to
you. Or you may experience checks
submitted for payment to credit card providers,
utilities, or your telephone bill, for example,
that have been "converted" to an electronic payment and
it is reflected on your bank statement
as such. Both of these changes allow for faster payment
processing; however, they are
different from "substitute checks".
Can I refuse to accept a "substitute check" in lieu of my original
check?
No. As of October 28, 2004, Check
21 legislation applies to all financial institutions,
service
providers, government agencies, or businesses with no
exceptions. The only time a THE
BILTMORE BANK OF ARIZONA customer may
receive a "substitute check" from us will be in
the form of a deposited item being returned for
non-payment.
How do I get a copy of a check I've written?
Follow the standard procedures. Go into the bank, call the bank, or sign
up for THE
BILTMORE BANK OF ARIZONA Internet
Banking and view the front and back of paid checks
provided at no charge.
Will checks clear faster?
The checks you write and those you deposit may clear faster, and
notification of checks you
deposited that are returned unpaid may occur more
quickly. "Float time", the time between the
cashing and the clearing of a check, will be reduced. A
better way to control the risk of
overdraft is to have sufficient funds in your account
before you write a check; view your daily
activity through Internet Online Banking.
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Check 21 Benefits
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Reduced vulnerability of the check processing system due to weather
or other events
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Faster
clearing of payments by check
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Improved funds availability and return item notification
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Increased security
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Improved research and reconciliation opportunities
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Fraud
mitigation utilizing Positive Pay
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Commercial and Consumer customers can view paid checks online
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Better
service to the nation's banking customers
Convenient Biltmore Bank of Arizona Options
THE BILTMORE BANK OF ARIZONA
provides our Individual Customers and Commercial
Customers with several options that make tracking
checks and managing cash more efficient.
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Online
Banking with Bill Pay™ (Personal Accounts)
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Track your transactions online and view both the front and back
of your paid checks.
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Pay anyone, anytime, from anywhere with Bill Pay™ services
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Visa®
Debit Card (Personal Accounts)
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Minimizes the need to write checks or carry cash, by allowing
you to pay for purchases directly from your Biltmore Bank of
Arizona account.
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ATM
(Personal Accounts)
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Commercial Online Banking (Business Accounts)
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Allows you to track your transactions online and view both the
front and back of your paid checks.
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Early fraud detection utilizing Positive Pay services
View our brochure "Checks Are Changing"
If you have questions or concerns please call us at (602) 992-5055.
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