In late October, President Bush signed into
law a bill called "Check Clearing for
the 21st Century Act" or Check 21, which
will become effective on October 28, 2004.
Check 21 was enacted to increase the efficiency
of the check-clearing process and to mitigate
the risks of potential threats or disasters
to the nation's transportation system. Its
purpose is:
- To improve the overall efficiency of
the payment system
- To facilitate check truncation by authorizing
substitute checks
- To foster innovation in the check payment
system without mandating the receipt of
electronic checks.
Check 21 authorizes financial institutions
to create a new negotiable instrument, a "substitute
check," commonly referred to as an image
replacement document (IRD). Basically, Check
21 makes a substitute check the legal equivalent
of the original paper check. The Act applies
to all types of checks, both consumer and
commercial.
A substitute check is a paper document that
contains an image of the front and back of
the original check and includes the MICR
(magnetic ink character recognition) line.
The substitute check bears a legend that
states, "This is a legal copy of your
check. You can use it the same way you would
use the original check."
What
Check 21 Means for Our Customers
In the short-term, you will not see changes in the way Cole Taylor Bank provides
service to you. Once Check 21 becomes fully effective, if you receive checks
images with your statement now, you will continue to receive check images.
However, these images may look slightly different in the future.
We will continue to provide
you with updates regarding Check 21. Be assured
that Cole Taylor Bank is formulating a sound
strategy to respond to this new check-clearing
environment, and we will harness the best
efficiencies the Act provides to assist our
customers in the best way possible.
(pdf_Business
Insights, September 2004)
Checks
are Changing: Check 21 Customer Information (pdf
brochure - September 2004)
pdf
brochure - September 2004)
If you have any questions
or require further information regarding
Check 21, feel free to contact Customer Services
at 847-653-7978. Contact
a banker now for
more information.
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