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| Personal Links | Check 21 | |||||||||||||
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How will Check 21 change the check payment process? Banks have used physical transportation, such as planes and trucks, to deliver checks between banks for payment. With Check 21, paper checks will be truncated or removed - from the check collection process and replaced with electronic image files. Image files can be electronically transmitted from one bank to another and cleared through the check-clearing network, reducing dependence on physical transportation that is subject to delays, such as weather or natural disasters. How does Check 21 work? Check 21 authorizes banks to create a paper reproduction or "substitute" check of the original paper check from an electronic image. The substitute check, also called an Image Replacement Document or IRD, replaces the original paper check in the collection process and is cleared through the check-clearing network. The substitute check becomes the legal equivalent of the original paper check. Check 21 permits any person to deposit, present, send for collection, or return a substitute check rather than the original check. What does the substitute check look like? A substitute check is a paper reproduction of an electronic image of an original paper check. The reproduction contains an image of the front and back of the original check. It includes the words: "This is a legal copy of your check. You can use it the same way you would use the original check." The special coded line at the bottom of the check, known as the MICR line, contains all the information appearing on the MICR line of your original check. This makes it suitable for automated processing in the same manner as the original check. Will I have to do anything differently and will my statement be different? No. You can still write checks as you always have. The bank that accepts the check from you, or from a business or person you write the check to, may create a paper reproduction or "substitute" check of the original paper check from an electronic image. That will then be processed just as the original paper check would have been. If you receive your checks back with your statement, you will receive the substitute check instead of the paper check. If you receive check images back in your statement, you will receive an image of the substitute check. If you do not receive your checks, or check images, you will continue to receive just your check listing as you always have. The substitute check information will be listed on your statement just as a regular paper check is. You also can view your statement and images of paid checks via the Web using our AllTime Onlinesm banking service. What happens to my original check? An original check may be destroyed by the processing bank once it is converted to a an electronic image. There are no requirements governing the retention of original checks. Substitute checks are legal substitutes for proof of payment. Can all checks be converted to a substitute check? Yes. All checks are eligible for conversion to a substitute check, including, but not limited to, corporate checks, money orders, traveler's checks, convenience checks, and government warrants. Do all institutions have to accept substitute checks? Yes. Substitute checks are the legal equivalent of the original paper checks for all purposes. All institutions must accept them as if they were the original checks. If someone writes a check to me and it is returned for insufficient funds, will I receive the actual check back? Possibly. If the check has not been turned into a substitute check, you will get the actual check back. If a substitute check has been created, you will receive the substitute check back. You can redeposit a substitute check just as you would the original paper check. Does Check 21 apply to all types of customer accounts? Yes. Check 21 applies to all types of accounts with check access. Can I choose not to accept the provisions of Check 21? No. All organizations and their customers must adhere to the national provisions of the Check 21 legislation. CHECK CONVERSION How is the creation of a substitute check different from check conversion? Check conversion is the method of converting an original paper check into an Electronic Funds Transfer (EFT) transaction for clearing through the Automated Clearing House (ACH) network. The ACH is a secure network used by banks and credit unions to transfer funds between financial institutions. In this process, there is no substitute check created. The types of check conversions you may be familiar with include: Can I get a copy of an Accounts Receivable Check if necessary? You can obtain a copy of the check from the company to which you sent the check. The copy is acceptable by the Internal Revenue Service and in a court of law. In addition, the information will be on your account statement. The account statement is generally recognized as proof of payment and is accepted by the IRS and in a court of law. Can I stop payment on a substitute check or a converted check? Yes. Just as you can with a paper check, you can place a stop payment before a payment is posted to your account. Is the process of creating a substitute check or creating a converted check safe? Yes. The electronic processes are safe. Payment information is transmitted via computers over a private network protected by encryption, special codes and extensive security systems and procedures. What are check images? Check images are much easier to store than paper or substitute checks that are returned in your statement. They are actual images of your checks and appear right on your statement. They are accepted by the Internal Revenue Service and in a court of law. |
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| Santa Barbara Bank & Trust,
First National Bank of Central California,
South Valley National Bank,
San Benito Bank,
and First Bank of San Luis Obispo
are divisions of Pacific Capital Bank, N.A., member FDIC.
© - Pacific Capital Bank, N.A. All rights reserved. | ||||||||||||||
