Community Dividend

Fed guide explains Check 21 changes

Published May 1, 2005  | May 2005 issue

A consumer guide from the Federal Reserve Board that explains recent changes in check processing is now available in English and Spanish. The Consumer Guide to Check 21 and Substitute Checksdescribes changes resulting from the Check Clearing for the 21st Century Act, or Check 21. The act, which took effect in October of 2004, facilitates the transfer of electronic check images. It allows banks to reduce the flow of paper checks, process them electronically and create "substitute checks," or paper copies of the front and back of the original check, when a paper check is needed. Check 21 reduces "float," or the lag time between when a check is processed and when the funds are actually deducted from a customer's account.

The guide describes how Check 21 affects consumers, provides examples of substitute checks and includes information on filing a refund claim if there is a problem with the receipt of a substitute check.

To access the guide in English or Spanish, visit