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Check Image: An electronic or digital image of an original check that is created by a depositor, a bank or other participant in the check collection process. Check images can be exchanged electronically by banks, printed for customer statement purposes, displayed on Internet banking Web sites and used to create substitute checks.
Legend: A substitute check must bear the following legend to be the legal equivalent to the original check: "This is a LEGAL COPY of your check. You can use it the same way you would use the original check."
MICR (Magnetic Ink Character Recognition) Line: Numbers printed in magnetic ink near the bottom of the front of the check to facilitate automated processing. These numbers identify the bank the check is drawn on, the account at that Bank, the amount of the check and other information.
Paying Bank: The bank that pays the check and the bank of the customer who wrote the check.
Substitute Check: A substitute check is a paper reproduction of an original check and is a legal equivalent of an original check for all purposes, provided the following:
- contains an image of the front and back of the original check;
- bears a MICR line containing all the information appearing on the MICR line of the original check, except as provided under generally applicable industry standards for substitute checks to facilitate the processing of substitute checks (regulations are still under advisement at this time);
- conforms, in paper stock, dimension and otherwise, with generally applicable industry standard for substitute checks; and
- is suitable for automated processing in the same manner as the original check.
A substitute check must also include information identical to the information on the original check. The bank that creates the substitute check must warrant that the check meets the requirements of being a legal equivalent of the original check. The substitute check must also bear the following disclaimer:
This is A LEGAL COPY of your check. You can use it the
same way you would use the original check.
The bank that creates a substitute check may process the check under normal paper-based check processing procedures.
Truncation: Refers to a number of processes for removing the paper check from the forward collection or return process while sending the check data forward in the check system.
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