The Check 21 Act

The Check 21 Act is a federal law that allows financial institutions to make electronic images of checks in order to process them. Prior to the Check 21 Act, checks were processed manually and would be delayed 2 to 3 days for the travel between plane to bank. The processing time was slower and it was costly to process the checks. This improvement on check processing has allowed the banks to be faster and more efficient.


The Check 21 Act affects consumers in several ways. First, consumers no longer receive their canceled checks. Consumers now received substitute checks, which reproduces both sides of the original check. Second, consumers have to take greater precautions to avoid writing bad checks. Since the processing time is quicker, a consumer may not beat the check to the bank.

Also, if a consumer has any problems with their substitute check, they are allowed to contest the problem and receive a refund if the error is because of the substitute check. While the process has changed, consumers still have the same legal protections with the substitute check as they would with their original check.