What Is the Purpose of Check 21?
A substitute check is a paper reproduction of an original paper check that must (1) contain an image of the front and back of the original check, (2) bear a Magnetic Ink Character Recognition (MICR) line containing all the information from the original check MICR line, except as provided in industry standards to …
What is a substitute check and your rights?
A substitute check is the legal equivalent of an original check for all purposes, including proof of payment, if it includes an accurate copy of the front and back of the original check and contains the words, “This is a legal copy of your check.
Do banks still use MICR?
The short answer is, Yes! If you’re printing checks on blank check stock, you certainly need a MICR printer and the security features that are exclusive to high-quality, OEM MICR toner. Checks won’t meet banking standards and could be rejected by a bank.
Which laws control the processing of substitute checks?
The Check 21 Act permits any financial institution (such as a commercial bank or credit union) that participates in the check collection process to remove or truncate the original paper check from the forward collection or return process and reconvert the paper check to a substitute check.
