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In today's
payment system, paper checks must be physically moved from
where the check is deposited to the financial institution that
pays the check. This process can take several days, sometimes
weeks, to complete. But the wait - and the cost of moving
checks - will decrease with Check 21, a new federal law for
financial institutions effective October 28, 2004.
Check 21
doesn't change how people or businesses write checks.
Instead, it impacts how checks are processed by
financial institutions. By enabling financial institutions to
scan paper checks and send images to electronic processing,
Check 21 creates more efficient ways of processing checks.
About Substitute Checks |
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Check
21 enables financial institutions to speed up check
processing by creating and transmitting electronic
images of checks known as "substitute checks." A
substitute check is a paper copy of the front and back
of the original check created from a scanned image. It
is slightly larger than the original check, and
contains the following information:
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What Check 21 Could Mean To
You |
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Although Check 21 is effective for financial
institutions on October 28th, 2004, not all
consumers and small businesses will see changes
immediately. Some financial institutions will be early
adopters of new check imaging technologies, and others
will implement changes more gradually.
For
Financial Institutions
Check 21 will impact every
financial institution in one way or another, since
they must be ready to accept check images from
other financial institutions. It is essential that
financial institutions understand and adapt to the
new regulations and requirements, and make
necessary adjustments to their check processing
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Top
priorities include:
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Educating employees
and customers about Check 21 |
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Preparing internal
check operations to receive or accept
substitute checks |
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Communicating to customers about their
protections under Check 21 |
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Planning for the
future on how Check 21 could be implemented |
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For
Consumers
Consumers won't see a
difference when they write checks, but they'll
notice the effects of processing changes under
Check 21. |
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Checks will clear
faster. For example, a check deposited in New
York from a bank in Los Angeles may be posted
in a matter of hours rather than days. |
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With faster check
clearing, financial institutions may be able
to detect fraud faster. |
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Consumers
will likely have more options in viewing bank
statements electronically |
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For
Small Businesses
Check 21 does not require
small businesses to change the way they make
deposits or accept checks from customers. All
checks drawn on U.S. financial institutions are
eligible for electronic processing with Check 21.
Changes small businesses may see include:
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A faster return and
collection of checks |
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Quicker access to
revenue from customers who pay by check. |
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Alternatives for returning checks in monthly
statements, providing options for secure
storage of images or substitute checks. |
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Some financial
institutions will use Check 21 as the
opportunity to promote new services or deposit
options designed for small businesses. |
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How PPH Is Responding |
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The PPH
Group is dedicated to providing as much information as
possible to you. As any new developments arise, we
will update you through this special section.
The impact of Check 21 will
become apparent as an increasing number of financial
institutions begin to utilize electronic processing.
As a trusted partner and leader in the check printing
industry, PPH is a knowledgeable resource for helping
financial institutions and their customers navigate
these changes.
Here
are some of the ways we are preparing to make the
transition easier: |
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Email:
info@pph-business-checks-forms.com
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