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CHECK 21 RESOURCES: October is Coming

Editor's Note: Normally the training page is meant to use in procedures, training, operations, or education. This month, however, we felt it might be of some help to our readers and administrators to learn about what kind of systems are "out there" to help prepare for Check 21. That's the reason for this special training page in this issue.

A number of companies have developed products to help banks take advantage of Check 21, the legislation that allows the use of Substitute Checks (called "image replacement documents" by most bankers) in lieu of original returned items. Bankers' Hotline does not endorse any one product, but it's beneficial to know some of what is available.

Advanced Financial Solutions, Inc. announced AFS Return 21, a product that allows any financial institution with check imaging capability to streamline the process of returning checks originally presented as paper. Rather than physically attaching a paper strip to the original items and re-encoding the item on a proof machine or power encode pass, AFS Return 21 identifies the return item and creates a substitute check all in one pass. The substitute check is created on special paper stock that is pre-perforated with a strip onto which the return MICR line is printed.Carreker Corporation recently announced that one of the largest correspondent bank/check processors in the U.S. has engaged the company to develop IRD software. The agreement includes software and services for the overall management of substitute checks. This will allow the client to create substitute checks, print and present them to banks that cannot receive images, and electronically archive the index and image information for future needs (such as recreating the original substitute check).

Carreker also recently announced that Creative Payments Solutions, a BB&T subsidiary has licensed Carreker's Source Capture™ solution, which allows corporate customers to capture images of checks, inspect the quality of the image captured, create an electronic deposit, and transmit the check and deposit data to the bank electronically - rather than physically transporting checks to various bank branches. Carreker also offers a full suite of Check 21 related back office solutions that manage adjustments, exceptions, and return items to help banks reduce both the banks' and their customers' fraud.

The Federal Reserve and CheckClear LLC, the owner of Endpoint Exchange Network announced their intentions to cooperate on establishing system connectivity to allow sharing and electronic exchange of check data and images between their respective platforms. The Fed provides check processing services including image capture and archives for 8,000 financial institutions. The Fed said it will introduce a new suite of services in response to Check 21. For example, customers with image-enabled operations will be able to send image cash letters and return image cash letters directly to a Federal Reserve Bank. Endpoint Exchange is a network of 4,000 image-enabled financial institutions that have the capability to send and exchange check images rather than paper checks for clearing. Through the cooperative effort, Endpoint Exchange organizations will be able to receive and process images from the Reserve Banks for delivery and presentment to member institutions.

Fiserv Inc. announced that it has launched Fiserv Clearing Network, which eventually will offer clearing and settlement services to all of Fiserv's 1,700 check processing clients. The network will allow Fiserv to directly settle checks drawn on other Fiserv clients. The clearing and settlement services will be offered through an agreement with United Bankers' Bank of Bloomington, MN. United offers correspondent banking services to community banks in seven states. Fiserv said it eventually expects to add banking partners throughout the country.

NetDeposit, a creator of electronic check processing software, announced its next generation platform, which is designed to accelerate migration to Check 21. The platform includes NetDeposit Remote for Business, which allows retail and commercial businesses with multiple locations, the ability to scan and capture check images for electronic deposits and Decision Gateway 1.6, which allows virtual sorting and routing to all payment channels including image exchanges, substitute checks or Automated Clearing House.

Parascript, LLC, an image recognition software company, announced release of its latest software package, CheckUsabilityXpert, which allows banks to examine both check image quality and usability. The software was released to help financial institutions prepare for Check 21 by minimizing risk of exchanging poor quality images for both truncating and receiving banks. The software can be used independently or with other systems already in place.

Troy Group Inc., a producer of check printing solutions, announced three new MICR printing solutions that are configured for printing substitute checks. The company also announced that it is offering consulting and software services to support Check 21 implementation.

As for the preparation and training of your own employees, all staff should be aware of the change - what it entails, how it will affect your institution, and how your customers and members are expected to react to it. We'd suggest at least three sources.

  1. Get the Check 21 Resource Guide. It's free. Just download the 21 pages from the pdf file you can get from any of the bank web sites. On,, Just type in Check 21 Resource Document on search and print it. You may not want to reproduce ALL of the pages for your staff, but some of them can be useful.
  2. Go on On the main page, scroll down to the box marked "Special Sections" Click on Check 21. You'll find many articles there that will help you in your communication of important points.
  3. Last, (but certainly not least - to us, at any rate!) I've written, and my partner and publisher, George Milner has produced, a training video to explain Check 21 to employees. All the training material comes with it, ready to duplicate. The video runs about 20 minutes, and costs $229. And, as a bonus, if you run a customer-view video in your lobby, there is also a three-minute video after the training portion that you are free to add to any marketing loop that you create (Or, for a small fee, we'll send you a 30-minute loop.) For more info, please call (800) 660-0080 or order online at

Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 3, 7/05

First published on 07/01/2005

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