A new federal law allows financial institutions to replace your original check with a "substitute check." This new law is called the Check Clearing for the 21st Century Act, referred to as Check 21.
A substitute check is a paper reproduction of your original check. It is a reduced image of the front and back of the original, including the signature and any endorsements. A substitute check is the legal equivalent of the original check, and it bears a legend stating that fact.
Why the change?
Check 21 is designed to streamline check processing between financial institutions. The law came about primarily as a result of the events of September 11, 2001, when grounded flights stopped the flow of checks — and hampered processing — for days.
More than 40 million paper checks are processed every day. The intention of Check 21 is to improve the efficiency and reliability of this process.
How does it work?
A financial institution receiving a paper check as a deposit or payment is now permitted to scan that check and send the information electronically through the banking system. In the past, the actual paper check had to move through the system.
If an original check written by you has been transmitted electronically, a substitute check will be included in your statement — or will be included as an image, if you receive imaged statements.
As you receive substitute checks, please keep in mind that South Shore Savings Bank did not send any information electronically. The depository bank of the person or company you made your check payable to decided to convert your check to an electronic transaction and substitute check. We received that image as a substitute check. When we receive a substitute check drawn on your account, we treat it just like a regular paper check.
How will this impact me?
The biggest impact will be the speed at which your checks will move through the banking system. The electronic conveyance of checks considerably reduces the time it takes for a check you wrote to reach us for payment. What may have taken days in the past may now be just a matter of hours. This effectively eliminates "float" time, making it critical for you to have funds available in your account to cover a check when you write it.
Can I request my original check back?
If you received a substitute check, your original check is unavailable for return.
What if I need a copy for legal reasons?
A substitute check is the legal equivalent of the original check and can be used as proof of payment. To request a copy of a substitute check, please visit one of our offices, or call us at (800) 660-7800 to speak with a customer service representative.
What are my rights regarding substitute checks?
There are laws and special procedures in place that allow you to report any discrepancies with your checking account. If you think there is a problem, contact us immediately. We will send you a notice explaining your rights.
What if I have questions that aren't answered here?
Should you have any questions, please feel free to call us at (800) 660-7800 or stop by any of our offices.
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