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FAQs for Check 21

The Check Clearing for the 21st Century Act (Check 21) is a federal law allowing banks that process checks to convert them to substitute checks making the exchange of funds easier and the check clearing process faster and more secure.

 

Does Check 21 change the way I write or accept checks?
No. However, checks you write, and checks you deposit, may clear faster.
If a check clears more quickly, do I get my money sooner?

Our hold and availability schedules are based upon when we anticipate a deposited item to clear. Check 21 does not ensure that funds from deposited checks will be made available sooner.

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".

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: "This is a legal copy of your check. You can use it the same way you would use the original check."

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 do not qualify as substitute checks.

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.

What happens if I need to show a copy of a check, such as for proof of payment?

The image that Cathay Bank provides you may be used as proof of payment.

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.

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, allowing 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.

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. 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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