Check 21

On October 28, 2003, President Bush signed H.R. 1474, The Check Clearing for the 21st Century Act, or Check 21, into law. The law is designed to improve the efficiencies in the nations check collection and payment system by allowing substitute checks to serve as the legal equivalent of the original check. The new law will eliminate transportation risks associated with the physical presentment of original checks. The nation became acutely aware of these risks when September 11th caused extensive delays in check collection when planes were grounded for several days. Check 21 allows banks to truncate a paper check, turn it into an electronic image and send that electronic image through the clearing system. Although banks are not legally required to accept electronic checks, they must accept substitute checks. The substitute check will be about the size of a business check and will accurately reflect the original check.

Since February of 2001, Gruver State Bank has been providing image statements to our customers. You will continue to receive check images, but some images will be substitute checks rather than images of the original. You will notice that checks will begin to post your account faster, therefore you should always make deposits before checks are written to avoid possible insufficient funds and/or overdrafts.

Please know that we value our customers and strive to provide products and services that meet or exceed your expectations.

For questions please contact:

Teague Winger, V.P., Cashier
Gruver State Bank
PO Box 978
Gruver, TX 79040-0978
(806)733-5061
gruverbank@gruver.net

Definitions:

Substitute Check – A paper reproduction of an original check. The substitute must be MICR encoded and machine readable. It must contain an image of the front and back of the check. It must accurately represent all information on the front and back of the check. It must have the following legend "This is a legal copy of your check. You can use it the same way you would use the original check". The substitute check ust bear all previous endorsements prior to creation.