BANKING AFFAIRS

Detailed explanation-1: -The Check Clearing for the 21st Century Act (Check 21) is a federal law that took effect on Oct. 28, 2004. It gives banks and other organizations the ability to create electronic images of consumers’ checks in a process known as check truncation.

Detailed explanation-2: -The Check 21 Act authorizes a new negotiable instrument called a “substitute check, ” which is a paper reproduction of an original check, and provides that a properly prepared substitute check is the legal equivalent of an original check.

Detailed explanation-3: -You can use it the same way you would use the original check. ‘’ A copy of an original check is any paper reproduction of an original check, including a paper printout of an electronic image, a photo copy, or a substitute check.

Detailed explanation-4: -Electronic Check Processing (ECP) is a systematic method used to convert paper checks into Automated Clearing House (ACH) transactions or Check21 items via a lockbox network or a mobile application.