What does Check 21 refer to?

Check 21 refers to legislation that facilitates the remote deposit capture of checks, enabling financial institutions to process checks electronically. This law, officially known as the Check Clearing for the 21st Century Act, was enacted in 2003 to modernize and streamline the check clearing process. Under this act, a bank can accept a digital image of a check and treat it as if it were the original paper check, thereby improving efficiency and reducing the time it takes to clear checks.

This legislation greatly enhances the ability of consumers and businesses to deposit checks without needing to go to a bank, allowing for convenience and quicker access to funds. The enactment of Check 21 marks a significant step toward digitizing traditional banking operations and reducing reliance on physical paper checks.