Check 21 Act

Checks represent a significant volume of payments that need to be processed, cleared, and settled.

The Check Clearing for the 21st Century Act (Check 21) facilitated wider use of electronic check processing.

It authorized a new legal instrument -- the substitute check -- a paper copy of an image of the front and back of the original check.

This report evaluates the implementation and admin.

of the act and determines: (1) the gains in economic efficiency from check truncation and evaluates the benefits and costs to the Fed.

Reserve System and financial institutions; (2) assesses consumer acceptance of the check truncation process resulting from Check 21; and (3) evaluates the benefits and costs to bank consumers from check truncation.

Illustrations.