WASHINGTON. – Ready or not, Check 21 is here and credit unions are going to have to accept those substitute renderings of such tendered documents. That’s the word from Brian Egan, vice president in the Retail Payments Office of the Federal Reserve System. He and Michelle Profit, CUNA associate general counsel, led a presentation on the check truncation act in a breakout session at CUNA’s GAC in Washington. The act authorizes the use of a new negotiable instrument called a “substitute check” and properly prepared substitute checks have the legal equivalence of the original, he said. However, he added, the act does not require the acceptance of electronic check images, doesn’t give them legal equivalence and does not require the purchase of any hardware or software. That said, “no credit union can opt out of the act, no credit union member can opt out and no governmental entities can opt out,” Egan said. He said final rules for Check 21 implementation will be published by July 28, after remaining open for comment until March 10. And once those rules become the lay of the land, Egan said, “Credit unions will likely want to educate their member service representatives on Check 21.” Credit unions also will be required to distribute consumer awareness notices and be ready to receive substitute checks “as a minimum response,” he said. The preparation process already has begun, Egan added. “Most DFIs we’ve talked to are actively investigating their options, talking to their vendors, management and board of directors and thinking about implementation phasing,” the Fed vice president said. [email protected]

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