On October 28, 2004, The Check Clearing for the 21st Century Act (Check 21) went into effect. The new law is intended to improve the efficiency of our country's payment systems. Under the law, your original check may be removed from the check process and replaced by an electronic image or a substitute check.
How will Check 21 Affect You?
While your checks may clear your account faster, these processing changes should be transparent to you most of the time. However, these changes will greatly reduce the time between writing a check and when it clears (float time) your account. Be sure you have sufficient funds in your account at the time you write a check.
What is a Substitute Check?
The Check 21 Act also provides for a new negotiable instrument called a substitute check. It is produced by a financial institution from the digital image of your check and is the legal equivalent of your original check. Similar in size to an actual check, this paper reproduction shows the front and back of your check and contains the following language, This is a legal copy of your check. You can use it the same away you would use the original check. Substitute checks include all the information on your original including the MICR line.
Substitute checks must be obtained from a financial institution. The institution providing the substitute check must warrant that it is accurate and must ensure that it meets industry standards for quality. Check copies you print from Grossmont Schools FCU's CU@U - Internet Branch are not substitute checks, they are copies. They will serve your need in most instances, but they do not have the same legal status as substitute checks.
When will you see a Substitute Check?
When you view a check online through CU@U - Internet Branch.
If you request a copy of a paid check, if it has been converted to an electronic file in the payment process, it will be reconverted to a substitute check to fulfill your request.
If you deposit someone's check into your checking or savings account, and that check turns out to be NSF, you will receive the bad check back in the form of a substitute check,
What are your rights regarding substitute checks?
In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account in error. The losses you may attempt to recover under this procedure may include the amount that was withdrawn from our account and fees that were charged as a result of the withdrawal (for example, NSF check fees).
The amount of the refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You also are entitled to dividends on the amount of your refund if your account is a dividend-bearing account.
If you use this procedure, you may receive a refund within 10 business days but no later than 45 calendar days. The refund will include dividends if the account is dividend bearing. We may reverse the refund if we later are able to demonstrate 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 was posted to your account, please contact us at:
Grossmont Schools FCU
1069 Graves Ave, Ste 100
El Cajon CA 92021-4573
You must contact us within 40 calendar days of the date we mailed you the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later.
Your claim must include:
- A description of why you have suffered a loss
- 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
- A copy of the substitute check and/or any information to help us identify the substitute checks.