Northland National Bank

Check 21


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Check 21


"Check 21" is a shortened version of a new Federal law called Check Clearing for the 21st Century Act, which goes into effect October 28, 2004.
  • The purpose of the law is to make the processing of checks and payments more efficient.
  • The law enables banks to take a picture image of a check. The image is then used as a substitute for the check with the same legal standing as the original paper check.
  • Check 21 is intended to reduce the check payment system's dependence on the physical transportation network (trucks, trains, or airplanes) and streamline the collection and return process for checks.
  • The legislation allows banks to clear paper based transactions as either a) the original physical check, b), an image of the original check, or c) a reproduction of the digitized image of the check (called IRD or Image Replacement Document).

How does it affect me?


  • As the collection and return process is streamlined, you may see checks clear your account faster and your deposited checks become available more quickly.
  • If you receive your paper checks each month, you may have substitute checks in place of the original checks.
  • If you receive image statements, you may see images of the original check or of substitute checks.
  • Indemnity is provided to all parties for losses that occur due to receipt of a substitute check that would not have occurred with the original check.
  • Both businesses and individuals must accept substitute checks beginning October 28, 2004.

What is Northland National Bank doing?


While the Federal government continues to refine and determine policies and regulations, Northland National will stay abreast of changes and work to make the new processes as seamless as possible for all its customers. Northland National will update this site as more information becomes available.


For more information, visit these other resources on the web:


The Federal Reserve       How Processing Works

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