The Check Clearing for the 21st Century Act or “Check 21” took effect October 28, 2004. The goal of “Check 21” is to reduce time, risk, and costs associated with paper check processing.

Today when you write a check for payment, the check is physically transported between banks. “Check 21” allows banks to convert a check into an electronic image and use a “substitute check” in lieu of the original check. A substitute check is a paper copy of the digital image of your original check—both front and back, with all endorsements—and is about the size of a business check. All banks must accept the substitute check as they would the original document.

What is Check 21?
The Check Clearing for the 21st Century Act, or "Check 21", as it is most often referred to, is new federal legislation which permits any entity who processes a check to create a "substitute check" by taking a picture of the check you write and processing it electronically, rather than actually physically transporting the check. This results in an electronic version of your check, which will be regarded as the legal equivalent of the original check you wrote. The original check you wrote is then taken out of circulation. If at any point an actual physical check is needed, a paper printout of the electronic check image is made, resulting in a substitute check.

Check 21 does not require a bank to create substitute checks. Instead, the Act requires everyone to accept substitute checks as the legal substitute of the check you originally wrote.

What are the benefits of Check 21?
Congress passed Check 21 to facilitate easier, more rapid funds transfer, as physically transporting checks takes time and is expensive. Inclement weather, labor strikes, or other interruptions in the transportation system can significantly slow down the check processing system. Creating an electronic check image will bypass the need for physically sending the check back and forth. In many cases, the amount of time required to move money out of your account to pay the recipients of your checks will be significantly reduced. The funds from checks you deposit may also be available sooner.

What do substitute checks look like?
Substitute checks are similar in size to original checks, with a slightly reduced image of the front and back of the original 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. Images of substitute checks will begin to appear in your monthly account statement, as banks and other entities begin to create electronic substitutes of your checks.

What consumer protection and warranties are provided?
Check 21 has features to protect consumers in case of discrepancies. A bank that truncates your check must warranty that the substitute check is accurate, and that the original check will not be processed in addition to the substitute check. If you believe your check was processed twice, or was processed for the wrong amount, Check 21 provides specific recrediting rights, which are outlined below.

What are my rights under Check 21?
The following paragraphs describe rights you have when you receive 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, as described in the Oak Brook Bank Deposit Account Agreement and Disclosures booklet.
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, returned 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 you have suffered a loss relating to a substitute check you received and that was posted to your account, please contact your banking office.

Redlands Main Branch 218 E State Street Redlands, CA 92373 909 798-3611 Palm Desert Branch 77-900 Fred Waring Drive, Ste 100 Palm Desert CA 92211 760 674-9260

Brea Branch 10 Pointe Drive Brea CA 92821 714 990-8862 Irwindale Branch 15622 Arrow Hwy Irwindale CA 91706 626 815-0875

Escondido Branch 355 W Grand Avenue Escondido CA 92025 760 745-9370   Temecula Branch 27645 Jefferson Ave. Ste. 116 Temecula, CA 92590 951 695-4916

You must contact us 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; and
• A copy of the substitute check and/or the following information to help us identify the substitute check (identifying information, for example the check number, the name of the person to whom you wrote the check, the amount of the check).