Speeding Check 21 ComplianceSpeeding Check 21 Compliance

Viewpointe Archive Services LLC is gearing up to let banks exchange images of checks instead of paper in preparation for the Check Clearing for the 21st Century Act, known as Check 21. Founded four years ago by Bank of America, J.P. Morgan Chase, SunTrust Banks, and U.S. Bancorp, Viewpointe is adding more than 60 million checks to its archive each day.

Viewpointe plans to have all 10 of its financial-institution customers using its image-sharing capabilities to clear checks by the middle of next year. The 10 banks are Bank of America, BB&T, First Tennessee National Bank, FleetBoston Financial (now owned by Bank of America), HSBC, J.P. Morgan Chase, National City, SunTrust, U.S. Bancorp, and Zions Bancorp. The banks process close to half of the 40 billion checks written in the United States annually. Fiserv Inc., which handles check processing for a number of smaller banks, also will use the service.

Banks already using Viewpointe's service all are running at or close to 100% prime pass, meaning that virtually all checks are imaged as they're run through check sorters. Exchanging check images is just a matter of changing a few lines of code. The additional work, Viewpointe CEO John Lettko says, "is acknowledging that we've got one item in the archive that's bound for another customer in the archive."

Images generally are captured within 24 hours after a paper check has been deposited; all other transactions are performed against the image, while the paper check itself is sent to the bank upon which it's drawn. After Oct. 28, when the act requires banks to accept facsimiles or scanned images in lieu of the original check, the paper check can be destroyed, with the image serving as its legal equivalent.

Separately, Key Bank and J.P. Morgan Chase last week said they're exchanging check images via the Image Exchange Network, operated by Small Value Payments Co., a consortium of banks. Key Bank and Chase, which recently concluded a two-month pilot, expect to exchange a growing number of check images throughout this year and next.