{
  "id": "RL32668",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL32668",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 321144,
      "date": "2004-11-09",
      "retrieved": "2016-04-07T20:04:34.890816",
      "title": "Electronic Banking: The Implementation of the Check 21 Act",
      "summary": "On October 28, 2003, President Bush signed the Check Clearing for the 21st Century Act into\nlaw\n( P.L. 108-100 , \"Check 21 Act\") to become effective on October 28, 2004. In the Check 21 Act,\nCongress gave the Board of Governors of the Federal Reserve System (Fed) the responsibility to\nprescribe regulations necessary to implement the provisions of the act. On July 26, 2004, the Fed\npublished its final regulations for the Check 21 Act. The purpose of the act is to allow banks to take\nadvantage of the potential cost savings of processing checks electronically. The final regulations\nfacilitate the wider use of electronic check processing without demanding that any bank change its\ncurrent check-collecting practices. It does this by authorizing the use of the substitute check. Check\n21 makes a substitute check the legal equivalent of an original check for all persons and all purposes\nincluding any provision of federal or state law if a bank has provided the warranties, and if the\nsubstitute check: (1) accurately represents all of the information on the front and back of the original\ncheck at the time the original check was converted electronically, and (2) bears the legend, \"This is\na legal copy of your check. You can use it the same way you would use the original check.\" It is\nimportant to note that this law makes each bank financially responsible for any substitute checks it\nhandles.\n If a consumer suffers a loss due to the use of a substitute check, the consumer has the right to\nmake a recredit claim, which the consumer may file with the bank holding his or her account. If the\nbank determines that the consumer's claim is valid, the bank will recredit the consumer's account for\nthe amount of the consumer's loss, up to the amount of the substitute check, plus interest if the\naccount is an interest-bearing account, no later than the end of the business day after the banking day\non which the bank makes that determination. If the bank determines that the consumer's claim is not\nvalid, because the substitute check for which the consumer made the claim was in fact properly\ncharged to the consumer account, the bank must send notice to the consumer no later than the\nbusiness day after the banking day on which the bank makes that determination.\n This report begins with a brief background of the check truncation issue, including a brief\nlegislative history of the Check 21 Act. The next section discusses what Check 21 does and does\nnot do. Next, it discusses the key rules and procedures of the Fed's final regulations. These rules\nrange from the provisions governing the substitute check to the expedited recredit for consumers and\nbanks. The report also examines consumer protection provisions that were incorporated in the law\nand those that were left out. The section on banks adopting electronic check clearing suggests that\nthe costs will slow adoption, and the conclusion suggests that Check 21 is not likely to reduce paper\ncheck clearing significantly in the short run. Other methods of electronic payments, however, will\nreduce paper check clearing more rapidly.\n This report will be updated as legislative and financial developments warrant.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}