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A new way of
processing checks went in to effect
on October 28, 2004. This new
Federal Law called The Check Clearing
for the 21st Century Act, or "Check
21" for short, will impact all
financial institutions, not just First
Community Bank of the Ozarks and our
customers. |
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The goal of
Check 21 is to reduce paper, combat
fraud and improve how checks are
processed. Traditional check clearing
involves the physical movement of paper
checks from the location where the check
was deposited, to the bank where the
funds will be drawn. With Check 21,
banks and other financial institutions
will have the option of creating,
processing and exchanging digital
pictures of checks rather than
physically transporting the original
paper check. |
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What does Check 21 do?
Check 21 allows financial
institutions to make a picture image of
a check which is known as a "substitute
check". A substitute check is a paper
reproduction that has been created from
an electronic image of the original
check. It has the same legal standing as
the original check and can be used for
proof of payment or for any other reason
that might require an original cancelled
check. The law allows banks to clear
paper transactions as either the
original paper check, an image of the
original check, or a reproduction of the
digital image of the check (called Image
Replacement Document or IRD). |
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Does this
mean I won’t be getting back my
cancelled checks?
If you receive
cancelled checks with your monthly
checking account statements, some of the
checks returned to you may not be the
original and may actually be substitute
checks. However, Check 21 does not
require that all checks be converted to
an image or substitute check. Those
customers who do not receive their
checks back with their statements may
request a copy of a check. First
Community Bank of the Ozarks will follow
the same check copy request process as
it does today; the check copy may just
look different. It could be a copy of
the substitute check instead of a copy
of the original check. |
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Can I continue writing checks as I do
today?
Yes. You may continue to write checks
and present them for payment the way you
currently do. However, because your
checks may be presented and cleared
electronically, it may take less time
for a check to clear your account. |
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As a bank customer, can I opt out of
Check 21?
No. Under the Act, no institution or any
of its customers may "opt out" of the
Act. All checks, except foreign checks,
are eligible to be converted to
substitute checks and all parties that
receive checks must accept the
substitute check in lieu of the original
paper check. Check 21 affects all
customers of banks, savings & loans and
credit unions. This includes consumer
customers, corporate customers and
governmental agencies. |
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What is
First Community Bank of the Ozarks
doing?
As of
October 28, 2004,
to comply with
Check 21, First Community Bank of the
Ozarks began accepting and
processing substitute checks. Currently, the
federal government is
continuing to finalize policies and
regulations pertaining to the Act. |
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For more information about Check 21
legislation, visit the Federal Reserve
Board internet site at
http://www.federalreserve.gov/paymentsys.htm
or contact First Community Bank of the
Ozarks at 417-336-3610. |
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