Frequently Asked Questions

Check 21

Q: Can I refuse to accept a substitute check?
A: A substitute check has the legal equivalence of the original check, if you would accept the original check, you must accept the substitute check

Q: Is there an "opt out" option for the member?
A: No. Any financial institution involved in the collection process can decide to convert an original item into a substitute check.

Q: How will I receive a substitute check?
A: Most likely you will receive a substitute check as a returned deposited item. In the past you would have received the original check stamped "NSF", "Account Closed", etc. In the future these will likely be substitute checks.

If you have business accounts, the business could create substitute checks for preauthorized debits. If your credit union accepts these items, it will increase the credit union's liability. You may want to address this in your account agreements.

Q: Does a member need the disclosure if they receive an image statement that contains the image of a substitute check?
A: No. The expedited re-credit rights only apply to the receipt of a physical substitute check. Electronic images and photocopies do not meet the definition of a substitute check.

Q: How can I tell if a substitute check is fraudulent?
A: This will be very difficult. Substitute checks must meet the following requirements:

  • Can be processed just like the original check
  • Must be MICR encoded and machine readable
  • Must include an image of the front and back of the original check
  • Must meet industry standards for substitute checks
  • Must bear a legend that states "This is a legal copy of your check. You can use it the same way you would use the original check."

Q: How do I recover funds when a member has filed an expedited re-credit claim?
A: You will be able to go back through the endorsement chain to recover the funds from the financial institution that made the error. If SunCorp is your processor, we will do this for you.

Q: How will Check 21 affect our share draft accounts?
A: You may see share drafts clear faster, otherwise you and your members will not see significant changes.