| Q1:
What is Check 21? |
Check
21 will streamline the check processing system. It will allow
banks to take a picture or an electronic image of your check
and process the check
electronically, rather than transport the paper check between
banks by vehicles or airplanes.
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| Q2:
When will I see this change? |
Beginning
October 28, 2004, at least some of the checks or check copies
you receive from us may be substitute checks.
|
| Q3:
Will Check 21 change the way I write or accept checks? |
No.
You will continue to use your current paper checks and accept
paper checks from others. Because of Check 21, some of these
checks may clear faster.
|
| Q4:
What are the benefits of Check 21? |
Faster
clearing of checks should make your checkbook register balance
more closely match the available balance according to the bank's
records. And, the likelihood
of having one of your checks lost or mutilated as it passes
through the banking system should be far lower than at present.
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| Q5:
What other impact will Check 21 have on me? |
Checks
will be processed more quickly, which may result in funds being
withdrawn from your account sooner than in today's environment.
|
| Q6:
Does Check 21 preempt state law? |
Check
21 will supersede any state law, including the Uniform Commercial
Code, that requires that the original check be produced to
establish payment or for
any other purpose.
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| Q7:
If the check clears more quickly, will I get my money sooner? |
If
a hold is placed on your deposit, the length of the hold will
be the same as would currently be placed. And, when a hold
is not placed on your deposit,
the length of time before a deposit becomes available for
withdrawal or payment of checks you have written will be the
same as at present. Our hold
and availability schedules are based upon when we anticipate
a deposited item to clear. Because we won't know whether the
other banks handling checks you
have deposited will use check 21 to speed up the clearing
process, we cannot shorten these periods.
But, because other banks may use Check 21 to hasten the collection of checks
you have written to others, it will be very important that you anticipate
quick collection of the checks you write by depositing money early, and
waiting for availability of those funds before you write checks against them.
Otherwise, your checks may not be paid, and, whether paid or not, you may
experience overdraft charges.
|
| Q8:
What happens to my original checks? |
When
an electronic image is created, your original check is "truncated"
or removed from the paper check collection process. The
original check may be destroyed soon after it is truncated or imaged. The
electronic image may be
used to create a paper "substitute check".
|
| Q9:
What is a substitute check? |
A
substitute check is a legally sanctioned document, with all
the rights and obligations given the original check written
from your checkbook. Substitute
checks are paper copies created from electronic images of
original paper checks. The front and back of the check along
with any endorsement will be
shown. Each substitute check also includes a statement identifying
it as a legal copy of the original check.
|
| Q10:
Will the substitute check look just like the original? |
It
may not be the same size as the original check. However, you
can use it to prove that the check was written and cleared
through the check payment
system. All substitute checks must accurately represent
all of the information on the front and back of the original
check when it was truncated
and bear the following language: "This is a legal copy of your check.
You can use it the same way you would use the original check."
This is an example of a substitute check. Your substitute check may appear
differently.
|
| Q11:
Do all check images qualify as substitute checks? |
No,
only images that meet the substitute check requirements qualify.
The typical images produced on an imaged statement will not
qualify as substitute checks.
|
| Q12:
Do I have to accept substitute checks as proof of payment? |
Yes.
Once a paper check is converted into a substitute check, it
becomes the legal equivalent of the original paper check.
Any bank or person must accept it as if it was the original
check.
|
| Q13:
Currently, I receive check images with my statement. Will that change? |
No.
You will continue to receive images, not originals, of processed
checks. However, you may notice that your image statement
may contain some images of original checks and some of substitute
checks.
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| Q14:
What happens if I need to show a copy of a check, such as for proof of payment? |
As
is now the case, you should be able to use the image that Cathay
Bank provides you as proof of payment.
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| Q15:
Does Cathay Bank, any other Bank, or any person have the option not to participate in Check 21? |
No.
Once the Check 21 legislation goes into effect on October 28,
2004, it will apply to all financial institutions and their
customers. There will be
no "opt out" exceptions.
|
| Q16:
I notice that some checks I write for payment of bills or at a store appear on my
statement as an electronic payment. Is that different from Check 21? |
Yes,
with that type of transaction your check is converted into
an electronic fund transfer that is cleared through the Automated
Clearing House (ACH)
network rather than through the check clearing process.
The transfer is posted on your statement as an electronic
item, and there is no physical
image of your check used in this collection process. This
can occur, for example, as follows:
- You send a payment in the form of a check to a company. The company
then converts the check into an electronic transaction and clears it
through the ACH network.
- You write a check at a store for an over-the-counter transaction. The
cashier swipes the check to capture the account information and
immediately returns your check to you. The transaction is then cleared
electronically through the ACH network.
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| |
| The following questions apply to you only if
you currently receive your physical checks with your monthly statement: |
 |
| Q17:
Does this mean I won't be getting back my canceled checks? |
While
Cathay Bank does not currently intend to convert the checks
you write to substitute checks, as of October 28, 2004, other
banks handling your checks may
do so. If this occurs and you ordinarily receive the original
checks you wrote with your statement, some of those checks
will instead be substitute checks.
And, the law permits the bank that converted your check to
destroy the original, so it may not be available even if you
want it.
|
| Q18:
What if there's an error involving a substitute check? |
The
Check 21 Act provides specific re-crediting rights for consumer
customers only. If you believe the substitute check does not
accurately reflect your transaction,
you should contact us immediately for research and investigation,
and possible re-crediting to your account.
|
| Q19:
What are my rights regarding a substitute check? |
In
certain cases, federal law provides a special procedure which
applies to substitute checks charged to a consumer account
only, it will allow you as a
consumer to request a refund for losses you suffer if a substitute
check is posted to your account (for example, if you think
that we withdrew the wrong
amount from your account or that we withdrew money from your
account more than once for the same check). The losses you
may attempt to recover from
this procedure may include the amount that was withdrawn
from your account and fees that were charged as a result of
the withdrawal (for example, non-sufficient
funds (NSF) fees).
The amount of your refund under this procedure is limited to the amount of your
loss or the amount of the substitute check, whichever is less. You are also
entitled to interest on the amount of your refund if your account is an
interest-bearing account. If your loss exceeds the amount of the substitute
check, you may be able to recover additional amounts under other law.
If you use this procedure, you may receive up to $2,500.00 of your refund (plus
interest if your account earns interest) within 10 business days after we
received your claim and the remainder of your refund (plus interest if your
account earns interest) not later than 45 calendar days after we received your
claim. We may reverse the refund (including any interest on the refund) if we
are later able to determine that the substitute check was correctly posted to
your account.
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| Q20:
How do I make a claim for a refund? |
If
you believe that you have suffered a loss relating to a substitute
check that you received and that was posted to your account,
please contact your
branch office. You must contact us within
40 calendar days of the date that we mailed (or otherwise
delivered by a means you agreed) the substitute check in question or the
account statement
showing the substitute check was posted to your account,
whichever is later. We will extend this time period if you were not able
to make a timely claim
because of extraordinary circumstances.
Your claim must be in writing and include:
- A description of why you have suffered a loss. For example, you
think the amount withdrawn was incorrect;
- An estimate of the amount of your loss;
- An explanation of why the substitute check you received is
insufficient to confirm that you suffered a loss; and
- A copy of the substitute check and/or the following information
to help us identify the substitute check in question:
- Check Number;
- Name of the person to whom you wrote the check;
- Amount of the check
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