LSU AgCenter Family Economist Explains Check 21

Jeanette A. Tucker  |  4/21/2005 9:29:46 PM

News You Can Use For February 2005

A new federal law, known as Check 21, makes it easier for banks to electronically transfer check images instead of physically transferring paper checks. Because of Check 21 and other check-system improvements, your checks may be processed faster – which means money may be deducted from your checking account faster, according to LSU AgCenter family economics professor Dr. Jeanette Tucker.

This acceleration creates a heightened need for consumers, before writing a check, to make sure their checking accounts have enough money to cover the check.

If you are one of the majority of consumers who do not receive their canceled checks with their account statements, you may receive "pictures" (known as digital images) of your checks, a list of your paid checks or a combination of these items.

"Check 21 will have little or no effect on these practices," Tucker says, but adds, "If you do get your canceled checks back in your regular account statements, you may notice some changes under Check 21." For example, your bank may start sending you a combination of original checks and substitute checks in your account statements. You may use a canceled substitute check as proof of payment just as you would use a canceled original check.

Tucker explains that the account agreement you have with your bank governs whether you receive canceled checks with your account statements. If you currently get canceled checks back with your statements, you will continue to receive your checks, unless your bank notifies you that it is changing your account agreement.

You may receive substitute checks in other limited circumstances. For example, your bank may give you a substitute check if you ask to have a particular canceled check back to prove a payment. Also, your bank might provide a substitute check to you when returning a "bounced" check that you deposited into your account.

By law, your bank may not pay a check from your account unless you authorized that payment. In other words, you are protected from having your bank pay the same check from your account more than once or from having your bank pay the wrong amount for a check. Check 21 does not change these protections. Check 21 does give you special rights, however, if you receive a substitute check from your bank.

A substitute check is a special paper copy of the front and back of an original check. The substitute check may be slightly larger than the original check. Substitute checks are specially formatted so they can be processed as if they were original checks. The front of a substitute check should state: "This is a legal copy of your check. You can use it the same way you would use the original check."

Tucker points out, though, that not all copies of a check are substitute checks. For example, pictures of multiple checks printed on a page (also known as an image statement) that is returned to you with your monthly statement are not substitute checks. Online check images and photocopies of original checks are not substitute checks either. You can use image statements and other copies of checks to verify that your bank has paid a check.

"The primary impact of Check 21 on consumers will be faster processing of substitute checks," Tucker says, explaining, "As a result, be certain you have enough money in your account to cover the checks you write."

The family economist offers additional tips for checking account holders:

• Always review your account statement to make sure the charges are correct.

• If you receive something other than a substitute check, be aware of your rights to resolve errors under other state and federal laws.

• Contact your bank right away if you notice an error in your account.

For information on related family and consumer topics, visit the FCS Web site at
Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.


On the Internet: LSU AgCenter:
Source: Jeanette Tucker (225) 578-5398, or

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