Steuben Trust Company

Important Changes To All Accounts

The Check Clearing for the 21st Century Act is new Federal legislation better known as “Check 21.” It will be effective October 28, 2004. The Act’s purpose is to improve the efficiency of the check clearing process by allowing banks to exchange electronic images rather than original paper checks.

Using electronic images means some of your checks may clear faster. So it’s
more important than ever to have the funds in your account at the time you
write a check. Some banks may hold or destroy your checks when they cash them. At that point your check is turned into a check image or substitute check depending on that bank’s technology.

For example, the check you write to pay your phone bill will be cashed by your
phone company’s bank. That bank has the option to hold or destroy your
check and the option to create an image or substitute check.

A substitute check is a paper reproduction of an original check. Banks that do not accept check images will have to accept substitute checks. A substitute check that conforms to “Check 21” standards is the legal equivalent of an original paper check.

Beginning in November, your monthly checking statements may include both your normal check images and images of substitute checks received for payments from your account, as seen below:




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