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~   Checks in the 21st Century
Check 21 Fact Sheet


Checks in the 21st Century
by:  Terry Jost
             President & CEO




  The Check Clearing Act for the 21st Century (Check 21) was
  signed into law by President Bush October 28, 2003 and will become
  effective October 28, 2004.  Check 21 permits banks to replace
  original paper checks with "substitute checks" that are made from
  digital copies of the originals.

  Today the entire banking system processes over 40 billion checks
  annually.  This new banking legislation will be changing how banks 
  may exchange these same items and utilize new technology. 

  By October 28, 2004 every bank will be required to accept substitute
  checks, just as they currently accept your original paper checks. 
  When you receive electronic images of your canceled checks with
  your account statement, you could also start seeing images of
  substitute checks after that date.

  Listed below is a Check 21 Fact Sheet, that explains key features
  of this new legislation.  Our bank website... contains a brief video presentation
  that explains this change in check collection as well. 

  Check imaging technology by Mountain Valley Bank has prepared us
  well for these upcoming changes.  Today, customers receive imaged
  copies of their original checks with their monthly statements, or can
  view those same images with their computer through our on-line
  NetBanking system. 

  Check 21 Fact Sheet

  What is Check 21?
In a nutshell, Check 21 (the Check Clearing for the 21st Century Act)
  allows banks to replace original paper checks with "substitute
  checks" that are made from digital copies of the originals.

  Why was Check 21 created?
  Check 21 was created to reduce the time, risks and costs associated
  with paper check processing.

  Currently, checks travel on trains, planes and automobiles during the
  clearing process.  When Check 21 becomes effective, banks will be
  able to send digital images of checks electronically, eliminating the
  need to physically transport paper checks between banks.  Check 21
  will also reduce uncontrollable transportation delays that can be
  caused by weather or natural disasters.

  The need for this new law became apparent after the tragic events of
  9/11.  Because planes were grounded for several days, our nation's
  check processing system came to a halt, interrupting cash flow for
  millions of individuals and businesses.

  What does Check 21 do?
  Check 21 will create a more efficient check processing system, with-
  out changing the way consumers write checks.  It simply requires
  banks and customers to accept paper copies of their original checks
  called "substitute checks."

  What is a substitute check?
  A substitute check is a paper copy of the digital image of your
  original check -- both front and back, with all endorsements -- and
  is about the size of a business check.  Check 21 legislation sets
  standards for quality and allows for substitute checks to be legal
  copies of the originals.  All banks must accept the substitute check
  as they would the original document.

  How will Check 21 impact me?
  If you receive your imaged canceled checks with your statement, you
  may also receive some substitute checks.  There will be less "float
  time," particularly for out-of-town checks.  Because check process-
  ing will be faster with the implementation of Check 21, funds may be
  removed from your account sooner than in today's system.  As
  always, make sure you have enough money in your account before
  writing a check.

  Is Check 21 mandatory?
  Check 21 does not mandate electronic processing of digital check
  images.  It simply makes it possible.  For banks that choose to
  process checks manually, a substitute check will be made of the
  image, which will be processed as if it were the original.

  When will Check 21 take effect?
  Check 21 was signed into law October 28, 2003, and becomes
  effective October 28, 2004.

  Are substitute checks an acceptable proof of payment?
  Yes, everyone must accept substitute checks beginning October 28,
  2004.  In fact, digital images of cancelled checks have been accepted
  as proof of payment by the courts and the IRS for decades.

  What happens to my original check?
  After taking a digital image, the bank may destroy your original
  check.  If necessary, a substitute check may be created.  Since
  substitute checks are legal copies of your original check, there is no
  need to save the original.

  What if I need a copy of my cancelled check?
  Contact the bank.  We will produce a copy for you.  Or, you may be
  able to print it yourself if you are using the on-line NetBanking
  service.  Again, check images have been accepted as proof of
  payment by the courts and the IRS for decades.

  How will I benefit with Check 21?
  *  You may have earlier access to your funds and faster, more
      convenient access to information about your checks -- such as
      online images.
 *    You'll have better fraud protection.  Faster processing means
      faster detection and faster resolution.
 *    If you detect a problem because of a substitute check, Check 21
      requires that the bank recredit your account, pending an investi-

  What items are subject to Check 21?
  All checks, including cashier's checks, payroll checks, personal
  checks and business checks are subject to Check 21.  Savings bonds
  are not checks and therefore are not subject to Check 21.

  How does Check 21 relate to electronic check conversion
  Check 21 involves creating digital images of original checks, but
  they are still processed under the same laws and regulations as
  paper checks.

  On the other hand, electronic check conversion, or e-check, occurs
  when a check is converted into an electronic funds transfer.  The
  transaction is then routed through the Automated Clearing House
  (ACH) network, the same system used by Direct Deposit.

  On your monthly statement, a substitute check will be listed with
  your other imaged checks; an e-check will be listed with other
  electronic funds transfers, such as automated debits for example:
  YMCA, cable, telephone, utility companies, newspaper, internet
  service, house or car payments, water and sewer, life insurance
  payments, etc.


    If you have questions or concerns, please contact a Personal Banker
    at a location nearest you, or call Bookkeeping at 308-632-7004 or
    Toll Free at 888-632-7004.




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Steamboat Springs

Meeker Walden Hayden
970-870-6550 970-878-0103 970-723-8221 970-276-9099