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Check 21 Standards: ASC X9 Statement on Check 21 Adoption

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The Check Clearing for the 21st Century Act-known as the "Check 21" law-was enacted in late October in a bill signed by President George W. Bush. The act provides a vehicle for financial institutions to use a legal equivalent for original checks (substitute checks) to make the US Payments System more efficient. The law authorizes that a substitute check may be used in the same way as original checks. Prior to the act, financial institutions were faced with various issues that forced them to transport physical documents to payor banks for funds availability credit.

"Financial institutions now have the ability to transport checks digitally in a more secure environment, saving time and costs while still providing their customers a physical document when required", said Andy Garner, senior financial consultant for Wachovia Bank. Mr. Garner acted as working group leader as the industry developed the financial standard X9.90-Specifications for an Image Replacement Document that serves as the centerpiece for the new law.

What is X9.90?
X9.90 is an American National Standard created under the Accredited Standards Committee X9 for the financial services industry. ASC X9 develops financial standards under the process and operating procedures of the American National Standards Institute (ANSI).

What does it do?
The X9 standard establishes the construction, layout, data elements, data content, and printing specifications for an "Image Replacement Document" (IRD). An IRD is a substitute image copy of a check that includes a machine-readable MICR line that will be the practical and legal equivalent of an original paper check.

"Delivering usable industry standards for the US Payments System is our mission", said Christopher Dowdell, chairman of X9B subcommittee for check standards and Product Manager of Relyco, Inc. "Developing this standard well in advance of enacting the new law was a key element in the entire legislative process. All associated with X9 are pleased to have the development of this standard move as quickly as it did to enable this important legislation".

Who is involved?
ASC X9 brings together bankers, vendors, credit unions, securities experts, financial consultants, government agencies, associations, printers, software manufacturers, retailers, credit experts and others to address technical issues, find the best solutions, and codify them into American National Standards. Almost 200 firms and organizations are members of ASC X9.

First published on 11/10/2003

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