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Check Clearing for the 21st Century: What will
it mean to you?
At Vectra Bank Colorado, we wanted to make you aware
of a new federal law that will take effect at the end of October. The
law is called the Check
Clearing for the 21st Century Act, also known as Check 21. The
goal of this law is to "improve the efficiencies of the nation's
payment systems." This law will affect check-writers
nationwide.
What is Check 21?
After you
write a check, it is transported between many financial institutions
by truck or plane before it is finally cleared from your account. Transportation
hours and fees add up.
Check 21 eliminates the need to transport
your original check, because it allows printed copies of a digital
image of your original check, known as "substitute checks," to be just as legally
acceptable as your original check. Financial institutions can now
make a digital copy of your check and electronically send it between
financial institutions, saving time and money.
Are all financial institutions required to electronically transfer
checks?
No, but some will do so after the law takes effect
in October. That
means that checks will continue to be processed faster. If you are used
to having a few days between the day you write your check and the day
the funds clear your account, be aware that time could be reduced. To
ensure that you will have the necessary funds to clear the checks you
write please be aware of your account balances to prevent overdraft. We
also recommend Vectra Bank’s Overdraft Protection on your checking
account(s). It’s simple, just call 1-800-494-1698 and
apply over the phone!
Will Vectra Bank transfer checks electronically?
Yes. Unlike many banks, Vectra Bank currently provides check
images with statements. The only difference you will notice is the
additional image of the “substitute” check, which will be clearly
marked. If
the financial institution converts your check to a digital image, they
will send the substitute
check
in its place. In that case, you
will see substitute check images on your statement or online, and if
you request a copy of this check, we would send you a copy of the substitute
check.
What can I do to help ensure my check payments are processed
accurately?
Ordering your checks from Vectra Bank Colorado
is more important than ever. The quality of our checks ensures the best possible digital
image and substitute check quality - so your checks are processed with
the greatest accuracy. You can also use "duplicate" checks
for an additional way to keep track of your payments.
Listed below is a list of Frequently Asked Questions
to assist you in understanding the new Check 21 law. If you have any additional
questions, please contact our Customer Services department 1-800-232-8948
or stop by any Vectra bank branch. We look forward to helping you
with all your financial needs in the 21st century!
Check 21 - Frequently Asked Questions
Q. What
is Check 21?
A. Check
21 is the shortened name for the Check Clearing for the
21st Century Act that will go into effect at the end of October
2004. It
requires all financial institutions to accept substitute
check as the legal equivalent of an original
check.
Q. When
does Check
21 go into effect?
A. Check
21 became
a law on October 28, 2003, but has an implementation date of October
28, 2004. To read your rights
under the Check 21 law, please click here.
(This link will open up a PDF file on your computer. If you are having
trouble with this file, you may need to download Adobe
Reader to your computer. Adobe Reader is a free download.)
Q. Why
was Check 21 passed?
A. In
essence, Check 21 brings the check-payment process into the
21st century. It allows financial institutions to replace the original
paper check with an electronic version that can be processed faster and
at a cost savings -rather than having to transport, manually process
and store the paper check. Plus, it helps reduce
fraud by going through fewer hands. And if fraud occurs, it can
be caught faster, which leads to faster recovery.
Q. What
is a substitute check?
A. A
substitute check is a reproduction or print-out of an original check
from a digital image. Vectra Bank currently includes
check images with customer statements. Now,
images of the substitute checks will be included as well. You
may also see substitute check images on your statement or online if
the original check wasn't sent to Vectra Bank.
Q. When
will I start to feel the effects of Check 21?
A. When
you receive your October statement.
Q. Will Check
21 cost me anything?
A. No, Check
21 is a law, and it costs nothing to consumers.
Q. How
long after I write a check will it be cleared from my account?
A. Once Check
21 is implemented, there's no telling how long it will take
for your check to be cleared. Depending on the financial
institutions and retailers involved, your check could be cleared
almost instantly or within several days.
Q. Is
this a similar process when retailers give me my check back after I've
made a purchase?
A. Yes. If
a retailer gives back your check at the store, your check has been converted
to an ACH or Automated Clearing House transaction. Unlike the Check
21 process, ACH is a system that electronically transfers funds in place
of the check. Under
Check 21, an electronic image of the check is transferred and then converted
back to paper at the paying bank. Retailers have been using this
system for several years because it helps them to streamline their payment
processing and clear funds faster. On your statement you would
see this transaction in a separate area than the rest of your checks.
Q. What
can I do to better manage my account and finances in light of Check
21?
A. If
you're used to having a few days between the day you write your check
and the day the funds clear your account, be aware that time could
be reduced. If you currently don’t
have Overdraft Protection on your checking account,
this is a great time to take advantage of this valuable service. Call
1-800-494-1698 to learn more and set up your account with Vectra Bank’s
Overdraft Protection or stop by your local Vectra Bank Branch. Otherwise,
balance your checkbook and maintain your checking records as in the past. If
you have any questions about your accounts, just ask us. We'd
be more than happy to help you!
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