Clearing for the 21st Century Act

US. (Check 21). A federal US law that aims to facilitate check (cheque) truncation by creating a new negotiable instrument - the substitute check.

Under the law, banks can truncate original checks and process check images electronically as well as deliver substitute checks to banks that want to continue receiving paper checks.

However, the law does not require banks to accept checks in electronic form or to create substitute checks, although it does require banks to accept substitute checks.

See also

• Cheque truncation
• Substitute check