Check 21 Act

Since the vast majority of 1st Source customers already receive check images in statements, you will notice very little difference in the way things look.

What is the purpose of Check 21?

To improve the payment system overall without changing the way customers write checks. It simply requires banks and customers to accept paper copies of original checks called “substitute checks”.

What is a substitute check?

It is the legal equivalent of the original paper check.

It is a picture of your original paper check, turned into an electronic image - similar in size with a slightly reduced image. The front of the check states, “This is a legal copy of your check, you may use it the same way you would use the original check.”

How could Check 21 affect me?

Your checks could clear faster - be careful - never write a check without money in the bank to cover it.

You may receive a substitute check for a check you deposited that is returned to you.

Because other financial institutions can convert original paper checks to substitute checks and they will set their own policies for original paper check retention and destruction, your original check may not be available for retrieval.

If you are one of our few customers who get your canceled checks back with your account statement, you may receive a combination of original checks and substitute checks.

If you request check copies or receive check images with your account statement or view checking images online, you may start seeing copies of substitute checks.

You can rest assured; a substitute check is the equivalent of the original paper check with all of the rights and obligations of the original check it replaced.

Do I need to order new checks?

No, your existing checks are compliant with the new regulations. As mentioned earlier, since the vast majority of 1st Source customers already receive check images in statements, we know that they work.

What if there is an error involving a substitute check in my personal checking account?

In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount of money from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover from this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, overdraft fees).

The amount of refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You are also entitled to interest on the amount of your refund if your account is an interest bearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other laws.

If you use this procedure, you may receive up to $2,500 of your refund (plus interest if your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest if your account earns interest) not later than 45 calendar days after we received your claim.

We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account.

How do I make a claim for a refund?

If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please contact us at:

1st Source Bank
Research Department
P.O. Box 1602
South Bend, IN 46634
(574) 235-2000

You must contact us within 40 calendar days of the date we mailed (or otherwise delivered by means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this period of time if you were not able to make a timely claim because of extraordinary circumstances.

Your claim must include:

  • A description of why you have suffered a loss (for example, you think the amount withdrawn is incorrect)
  • An estimate of the amount of your loss
  • An explanation of why the substitute check you received is insufficient to confirm that you suffered a loss
  • A copy of the substitute check and/or the following information to help us identify the substitute check: the check number, the name of the person to whom you wrote the check, the amount of the check.
Thank you for being a 1st Source Bank customer. We truly appreciate your business. If you ever have a problem with
Check 21, or with any other banking matter, we are committed to correcting errors quickly, and to treating all of our clients ethically, honestly and respectfully.