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in the check clearing process and more often. It also allows all U.S. financial
institutions to start the process of substituting paper checks With electronic checks
at any point during the check collection process.
What is truncation?
Truncation means to remove an original paper check from the check process, and in
its place make a substitute electronic check. In other words, truncation means you
do not receive the actual cancelled check back With your monthly statements.
Because credit unions have been truncating checks for several decades, you will
see minimal changes. One change you may notice, however, is that if you request a
copy of one of your cleared checks, you may actually receive an Image Replacement
Document, or IRD (an electronic check equivalent), which will carry all the
information of your original check..
What are the main effects of Check 21 to me?
You won’t be able to get your original paper checks back, because your financial
institution will no longer have them. Checks you write will clear sooner, increasing
the risk that a check will bounce if funds are not in the account when
the check is first written. You may not get access to the funds from checks you
deposit any sooner, because the new law does not shorten check hold times.
Why is Check 21 important?
Check 21 will provide savings by allowing financial institutions to substitute paper checks With an electronic
equivalent sooner and more often during the check clearing process. Additional costs savings are realized because
financial institutions can eliminate the handling, manual processing and storage of paper checks. In addition, Check
21 allows for faster collection and return of checks, which can help mitigate check fraud. It also reduces check
clearing time, which provides you With greater control over your account and personal finances.
Will I be able to get a copy of a cancelled check if I need one?
Yes. However, as mentioned above, the cancelled check may actually be an electronic check substitute of your
Will this substitute copy be legal?
Yes. A substitute check is the legal equivalent of its original check for all purposes, if it meets all specified
requirements. This substitute check can be used in the same legal manner as if it was your original cancelled paper
Is there anything I should do differently With regard to my credit union checking account?
No. Accurately maintain your checking account records and reconcile your statements timely, as you have in the
past. As always, if you have any questions about your accounts, please call or stop in to see us– we would be
happy to assist you.