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.

Check 21 Myths & Realities The first step to understanding Check 21 is to identify facts and common misperceptions about the legislation. For example, a common misperception is that Check 21 requires check imaging or that all financial institutions accept checks electronically. In reality, Check 21 simply provides new options for check processing.

Common Myths about Check21 The legislation Mandates the use of check imaging Check 21 Authorizes image exchange Retailers are required or mandated to handle check conversion at the point-of-sale

Check 21 Realities Checks aren't going away. Check 21 supports the use of checks by creating a more efficient processing system. With a more streamlined process, checks will clear faster. Check 21 will help financial institutions to more quickly detect check fraud. Check 21 changes will be gradual because check imaging requires long term planning.