As a customer of Cornerstone Bank, we feel it's important for you to know about the Check Clearing for the 21st Century Act (Check 21 Act).  The Check 21 Act authorized a new negotiable instrument called a "substitute check" which will be used for clearing and settlement.   A substitute check is a paper reproduction of the original check that contains an image of the front and back of the original check and can be processed just like the original check.   The Check 21 Act provides that a properly prepared substitute check is the legal equivalent of the original check for all purposes.  This disclosure provides information about substitute checks and your rights.

What is "Check 21"?

Check 21 is a federal law designed to enable banks to transmit more checks electronically, which should make check processing faster.  Check 21 became effective October 28, 2004.

How will Check 21 make check processing more efficient?

Instead of moving millions of checks around the country from bank to bank, they can capture a picture of the check and transmit the information electronically.   The process enables banks to reduce the need of transporting paper checks by truck or plane.

What is a substitute check?

To make check processing faster, federal law permits banks to replace original checks with "substitute checks".  These checks are similar in size to original checks with a slightly reduced image of the front and back of the check.  The front of a substitute check states: "This is a legal copy of your check.  You can use it the same way you would use the original check."    You may use a substitute check as proof of payment just like the original check.

Some or all of the checks you receive back from us my be substitute checks.   This notice describes rights you have when you received substitute checks from us.  The rights in this notice do not apply to original checks or to electronic debits to your account.  However, you have rights under other law with respect to those transactions.  

All checking account customers must accept substitute checks as the legal equivalent of any checks they wrote to pay bills or for purchases.

Example of the front of a substitute check:

Example of the back of a substitute check:

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 withdrawal (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 the 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 receive 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:

Cornerstone Bank
9120 W. 135th Street
Overland Park, KS  66221

You must contact us, in writing, within 40 calendar days of the date that we mailed (or otherwise delivered by a 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 (for example, you think the amount withdrawn was 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 and the date of the check.