What is the Check Clearing for the 21st Century Act?

The Check Clearing for the 21st Century Act (or Check 21) is a federal law enacted in 2004 that allows banks to process check information electronically. This includes creating a digital version of a paper check, known as a “substitute check,” that can be used to move money between financial institutions. In Tennessee, the law allows banks to process check information faster than ever before. Check 21 eliminates the need for banks to physically transport paper checks between banks. Instead, banks create a digital version of the check by scanning it into a computer and then sending the digital version electronically. The substitute check is treated just like a regular paper check and can be used to make payments. The substitute check contains all the information that is contained in the original check, including the payee and the amount payable. In Tennessee, Check 21 also gives consumers more options when it comes to how they can pay for goods and services. For instance, banks can now offer electronic check services where customers can pay for purchases with a check directly from their checking account without having to write a paper check. This makes paying bills and making payments more convenient and eliminates the need for people to carry large numbers of paper checks.

Related FAQs

What is the Community Reinvestment Act?
What laws protect personal banking information?
What is the Fair Credit Billing Act?
What is the Gramm-Leach-Bliley Act?
What is a loan originator?
What is the Fair Debt Collection Practices Act?
What is the Federal Trade Commission Act?
What is the Bank Secrecy Act?
What is the Home Affordable Foreclosure Alternatives Program?
What is the difference between a bank and a credit union?

What is the Check Clearing for the 21st Century Act?

Related FAQs

Related Blog Posts