San Diego, CA. Beginning on
Thursday, October 28, 2004, a new law takes effect that
will change the way checks are processed and returned to
people who write them, also called the originator(s),
which includes personal checks and also commercial,
retail, Treasury and travelers checks.
The new law is called the "Check Clearing for the 21st
Century Act" or simply "Check 21." Check 21 encourages the
use of image technology by the banking industry to improve
the efficiency of the check payment system and also lower
check processing costs.
Check 21 authorizes the creation of a new instrument, an
"image replacement document" (IRD). An IRD is a substitute
check that has been imaged from the original paper version
presented to the clearing bank. It has the same legal
status - for proof of payment, for example - as an
The IRD contains images of the front and back of the
original check including signature(s), the memo line, any
endorsements and additional printed information added
during the clearing process. Additional merchant written
information added to the check at the time of acceptance,
such as driver's license or phone numbers will be included
in the image on the substitute check. Printed merchant
audit information also will be included where it is
An IRD can be stored electronically, transferred
electronically, and then printed out whenever needed.
Check 21 requires that each IRD carry the legend, "This is
a legal copy of your check. Use it the same way you would
use the original check."
If you currently receive your canceled checks with your
business checking statement, you will probably not notice
much change immediately. However, after Oct. 28, you may
notice more and more original checks being replaced by
IRDs. If your statement option already suppresses check
return, you won't see any change, unless you ask for a
canceled check for proof of payment. Then you'll likely
receive an IRD instead.
Many major banks are taking advantage of the changes
introduced by Check 21 to improve the efficiency of their
own check processing and clearance systems and to provide
customers with greater service and value.
By the end of 2004, most major bank's check-processing
centers will be fully image-enabled. This means that they
may be able to offer you a variety of options for
accessing your checks - including viewing them online
sometime in early 2005.
Another feature of Check 21 is that checks you receive may
clear sooner, shortening "float" times. This will enable
you to learn sooner when a customer check is returned for
non-sufficient funds or "account closed" allowing you to
take action faster.
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.