Common use of Substitute Check Clause in Contracts

Substitute Check. The Check Clearing for the 21st Century Act (“Check 21”) enables financial institutions to send checks to each other electronically, and enables the Credit Union to receive a paper copy of the electronic check (called a “substitute check”). Financial Institutions receive substitute checks when a deposited check is deposited to an account and that check is returned unpaid, the check is returned to the depositing institution in the form of a substitute check. Substitute checks are the legal equivalent of a paper check for all purposes. The Credit Union is not required to create substitute checks, but must accept them. The substitute check will state, “This is a legal copy of your check. You can use it in the same way you would use the original check.” You will be provided with a disclosure that a substitute check is the legal equivalent of an original check, along with the member rights that apply when a member in good faith believes that a substitute check was not properly charged to his/her account.

Substitute Check. The Check Clearing for the 21st Century Act (“Check 21”) enables financial institutions to send checks to each other electronically, and enables the Credit Union to receive a paper copy of the electronic check (called a “substitute check”). Financial Institutions receive substitute checks when a deposited check is deposited to an account and that check is returned unpaid, the check is returned to the depositing institution in the form of a substitute checkSubstitute Check. Substitute checks are the legal equivalent of a paper check for all purposes. The Credit Union is not required to create substitute checks, but must accept them. The substitute check will state, “This is a legal copy of your check. You can use it in the same way you would use the original check.” You will be provided with a disclosure that a substitute check is the legal equivalent of an original check, along with the member rights that apply when a member in good faith believes that a substitute check was not properly charged to his/her account.