What is Check 21?

Check 21 refers to the Check Clearing for the 21st Century Act. Check 21 is a federal law that allows banks to handle more checks electronically. It allows banks to

• truncate a check by removing the original from processing.
• exchange images of a check instead of the original paper check.
• create a special paper copy, called a substitute check, of an original check.

A substitute check is

• a legal document, with all the rights and obligations of the original check.
• a reproduction that includes all information and endorsements from both the front and back of the original check.
• used as proof of payment.

More information on this topic can be found at Check Clearing for the 21st Century - FDIC.

Last Reviewed: April 2021