What is Check 21?
“Check 21” is the name of a new and important legislation designed to accelerate the check clearing process. As of now, banks generally transport checks physically to collect the funds represented on the check. Check 21 will allow an institution to create a “substitute check” and transport it electronically rather than physically.
What About My Original Check?
During the process of creating a substitute check, your original check will be “truncated”. “Truncated” simply means the physical check will be removed from the clearing process. The substitute image is used in place of the physical check that was truncated. In return, the substitute image is transmitted and cleared electronically. The bank who truncated your check may destroy it after the substitute image is cleared.
How Is A Substitute Check Different?
The substitute check is an electronic image of front and rear of your original check. It will conform to size standards of paper checks and contain the MICR Coding found at the bottom of your checks. In fact, the substitute is an electronic image of the original check you wrote. The bank will use this image to clear your check instead of waiting for the paper check to physically arrive. In essence, the new process eliminates the travel time paper checks require while being physically transported from bank to bank.
Will My Checks Clear Faster?
Your checks will clear faster because the physical transportation of checks will become unnecessary. When you write a check, it will return to your bank much faster than before.
What About Copies of My Checks?
You will be able to receive a copy of the substitute check, and it will be treated the same under the law as your original check. The substitute check proves that your original was processed through the system.
How Will This Affect My Statement?
If your actual check is returned in your statement, then you will receive a physical copy of the substitute check used in clearing your original check.
What Must I Do?
You may continue to write checks as in the past. The accelerated clearing process will occur between the involved banks after you write your check. Therefore, the act requires no new action on your part.
What Are My Rights Regarding Substitute Checks?
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 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 under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawl (for example, bounced check fees). The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You also are 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 law. 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 write to:

Lusitania Savings Bank
107 Pulaski Street
Newark, NJ 07105

You must contact us within 40 calendar days of the date that 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 time period 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.
  • 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.
What are electronic transfers?
Electronic transfers are pre-authorized transfers including but not limited to ACH transactions, overdraft protection, telephone transfers, and internet banking transfers.
What are ACH transactions?
Automated Clearing House transactions are pre-authorized direct deposits from payroll, social security payments, insurance benefits, dividends, annuities, and tax refunds; pre-authorized payments such as insurance premiums, loan payments, utility bills; and ATM and Point of Sale Transactions.
What is the limit for pre-authorized transfers for Savings Accounts?
Pre-authorized transfers shall be limited to six transfers per month. Pre-authorized transfers include ACH, overdraft protection, and phone/internet transfers.
What is Electronic Check Conversion?
Electronic check conversion occurs when you authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check for bill payments and purchases.
What should you do in case of an error?
Contact us at (973) 344-5125, or write to 107 Pulaski Street , Newark , New Jersey 07105 , as soon as possible, if you think that your statement or receipt is wrong or if you need more information about a transfer listed on your statement or if a transfer has been made without your permission. We must hear from you no later than 15 days after we sent you the first statement on which the problem or error appeared.