What Is Check 21?
The Check Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law (public Law 108-100) enacted into law October 28, 2003 by the 108th Congress. It took effect one year later, on October 28, 2004. The law allows the recipient of a paper check to create a digital version, thereby eliminating the need for further handling of the physical document. It paves the way for the industry to save billions of dollars and increase the speed in which checks are processed.
Consumers are most likely to see the effects of this act when they notice that certain checks are no longer being returned to them with their monthly statement even though other checks are still being returned. Another effect of the law is that it is now legal for businesses to use a scanner to capture check images and deposit them, a process known as remote deposit.