Do we need a separate bank policy for Check 21 or may it be included in other bank policies as Reg CC? How are others approaching this aspect of Check 21?

Check 21's primary contribution is the creation of the substitute check. It's a Band-Aid or stop gap measure that should eventually "go away," although IRD's will stick around as replacements for lost or destroyed items. Your relevant procedures deserve considerable review and analysis, particularly if you produce substitute checks.

It has no effect on your Reg CC disclosures regarding funds availability.

Beyond the consumer disclosures it requires for some accounts, I have difficulty making it into a policy issue, but note the recent FIL issued by the FDIC talks about updating policies. They may be more imaginative than I am or may have just stuck the reference in out of habit.

I am currently writing procedures for the Data Processing department. Basically the procedures are only covering Expedited Recredit provisions and how to submit a claim to a idemnifying bank. Since there are going to be regulatory requirements similar to Reg E with having to send letters to the customers regarding their claims, I felt that there should be something in writing and to go ahead and provide them with procedures on how to accept a claim, how to compute the timeframes required by the act, and how to resolve the claim.

I think it is best to give them sample letters to send to the customers. Since these folks usually don't have much experience with written communication with the customers, you don't want to leave it to chance what the form and content of the letters may end up looking like.