The Value of Membership
At Community United FCU, you’re not just a member — you’re an owner of the
credit union! Members expect more value and deserve more respect than the
average customer receives at non-cooperative financial institutions. Our first
priority is serving the best interests of our members, not making profits for
ourselves. It’s the reason we exist, and it will always be our commitment to
Check Processing Enters the
What you need to know about the new law that
changes the way we process your checks
A new federal law, The Check Clearing for the 21st Century Act, also known as Check 21, will change the way checks clear your account. Currently, when you write a check to an individual
or a business and they deposit it, their financial institution must physically transport the check to your financial institution in order to “clear” the check. With Check 21, this is no longer necessary. Check 21, which becomes effective October 28, 2004, gives financial institutions the option of creating, processing and exchanging a legal copy, a “substitute check,” for
payment. This substitute check is actually an electronic duplication of the original check (showing both front and back), which can be processed electronically.
The purpose of the act is to create greater efficiency and security in the check processing system and to reduce processing time. The new system will mean that checks will clear your account more quickly because financial institutions will not be required to transport the physical check in order to process it. Today’s existing check payment system exchanges over 40 billion checks a year. Supporters report that the new law could reduce the cost of transporting paperwork cross-country by $2 billion a year.
A substitute check will be the legal equivalent of the original check. A substitute check must:
- Include an accurate representation
of both the front and back of the
- Bear a magnetic ink character
recognition (MICR) line with all of
the information from the original;
- Conform to the industry standards for substitute checks;
- Be as suitable for automated
processing as the original;
- Contain a disclosure that states,“This is a legal copy of your
check.You can use it the same
way you would use the original
What does Check 21 mean for you?
The biggest change for most account
holders is that in some cases they
may no longer receive the original
cancelled checks in their monthly
The speedier processing possible with
Check 21 also means that “floating a
check” will virtually never work! A
check that once would have taken
days to clear will now clear in hours.
The best advice for credit union
members is always to be certain funds
are present in your account before
writing a check.
If you have questions regarding Check
21, call a members service representative
at (912) 285-5150.