Check 21 Speeds Checking, Sinks Your Float!

Dear Members,

At ECU Credit Union, we wanted to make you aware of a new federal law that will take effect at the end of October 2004. Will this law affect you? Yes - it will affect check-writers nationwide, which is why it is so important that you read this letter.

The law is called the Check Clearing for the 21st Century Act - or Check 21 for short. The goal of this law is to "improve the efficiencies of the nation's payment systems."

Why do our nation's payment systems need improving? After you write a check, it's transported between many financial institutions by truck or plane before it's finally cleared from your account. And transportation hours and fees add up.

The benefits of Check 21 . . .

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 as legally acceptable as your original check. So 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'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.

Will ECU Credit Union transfer checks electronically?

No, not at this time, but again, other financial institutions may. So if you currently receive your canceled checks in your statement from another financial institution, you may not always get your original check back. If the financial institution converts your check to a digital image, they will send the substitute check in its place. If you request a copy of this check, we would send you a copy of the substitute check.

Our checks help ensure your check payments are processed accurately. Ordering your checks from ECU Credit Union 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. By using "duplicate" checks it provides an additional way to keep track of your payments. Call 1-800-355-8123 when it's time to reorder your checks or click here for a link to reorder online.

If you have any other questions, click here for a list of Frequently Asked Questions. You can learn about our products and services by calling 1-800-382-2400. We look forward to helping you with your every financial need in the 21st century!

Sincerely,

Susan Langley

Regional Branch Manager

P.S. Remember that Check 21 applies to the entire financial industry, not just ECU Credit Union. Every person who writes checks will occasionally receive substitute checks in place of their original checks.

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 checks as the legal equivalent of an original check.

Q. What is a substitute check?

 A. A substitute check is a reproduction or print-out of an original check from a digital image. If you currently receive canceled checks in your statement from another financial institution, you may receive substitute checks in place of your original check.

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. Will Check 21 cost me anything?

A. No, Check 21 is a law, and it costs nothing to consumers.

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. This gives financial institutions a full year to comply with the law.

Q. When will I start to feel the effects of Check 21?

A. If you get your canceled checks in your statement from another financial institution, you may begin to see a few substitute checks shortly after the law goes into effect. Over the next few years, that number will gradually increase, and you may receive most of your checks as substitute checks. You may be effected if an item deposited to your account is returned to us in the form of a substitute check.

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. ACH is a system that electronically transfers funds. Retailers have been using this system for several years because it helps them to streamline their payment processing and clear funds faster.

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 in several days.

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 the time could be reduced. The best bet is to balance your checkbook regularly and maintain your checking records as you have in the past. If you have any questions about your accounts, just ask us. We'd be more than happy to help you!