Bank: Any depository financial institution, including a national bank, a state bank, a federal or state savings bank, a credit union, or a savings association.

Bank of First Deposit (BOFD): A Bank that accepts a check for deposit from a customer. It is also the institution to which a check would be returned if the check is not paid. Also called: Depositary Bank.

Binary Image: A black and white image of a check where each pixel can be stored in memory by one bit of information since it is binary - either black or white.

Black and White Image: The print on the image of an original check or substitute check is only in black and white tones.

Capture: Reading and storing data from the check MICR line to enable the funds represented by the check to move between banks and their customers.

Cash Letter: A group of checks packaged and sent by a Bank to another Bank, clearinghouse, or a Federal Reserve office. A cash letter is accompanied by a list containing the dollar amount of each check, the total amount of the checks and the number of checks in the cash letter.

Check 21 Act: Check Clearing for the 21st Century Act.

Check Conversion: The processes of converting a source document (a paper check) to an ACH debit or ATM/POS debit. Check conversion is different from check truncation, which as facilitated by the Check 21 Act. When a check is truncated, the transaction remains subject to check law. When a check is converted to an ACH debit, the rules of the National Automated Clearing House Association apply.

Check Image: An electronic or digital image of an original check that is created by a depositor, a Bank or other participant in the check collection process. Check images can be exchanged electronically by banks, printed for customer statement purposes, displayed on Internet banking websites, and used to create substitute checks.

Check-to-Image Conversion: A process by which a check image is created from an original check or substitute check. Check images are processed through the check clearing system and posted to a customer account in the same manner as a paper check.

Check Safekeeping: Truncation by the paying bank of the original check or substitute

Depositary Bank: See Bank of First Deposit.

Depository Bank: See Bank.

Depository Financial Institution (DFI): See Bank.

Digital Image: See Image.

Electronic Check Presentment (ECP): An electronic record governed by check law, created from the entire MICR line on a check and suitable for posting to a customer’s account. ECP transmissions may stand alone or may be followed by or accompanied by check images or paper checks. ECP transmissions are governed by check law.

Electronic Check (e-check): Used to refer to several types of electronic transactions that debit a checking account. An electronic check is not a substitute check.

Image: A digital representation of all or part of an original check or substitute check.

Image Exchange: An exchange of some or all of a digitized image (or images) of a check.

Internet- or Telephone-Initiated Payments: A transaction that is initiated over the Internet or via phone, which is processed as an electronic debit.

Indorsement: Information used to record the transfer of a negotiable instrument from one holder to another. Indorsements are placed on the check by payee(s), by the Bank of First Deposit, and by Banks subsequently handling the check. Electronically associated indorsements may also accompany electronic check records without being physically placed on the check. Indorsements are used to track the routing of the check in electronic or paper form.

MICR (Magnetic Ink Character: Numbers near the bottom of the front of the check to facilitate automated processing. These numbers identify the Bank the check is drawn on, the account at that Bank, the amount of the check and other information. The position and content of the MICR line are governed by industry standards.

On-Us Field: The MICR print band area between the closing amount symbol and the opening routing symbol. Arrangement of the on-us field is variable, specified by the financial institution on which the check is written. It may include such information as the user's account number, a consecutive number, and a transaction or processing code.

Paying Bank: The Bank that pays the check. The Bank of the customer who authorized the check.

Reconverting Bank: The Bank that creates a substitute check; or if a substitute check is created by an entityother than a Bank, the first Bank that transfers or presents that substitute check.

Returning Bank: A Bank (other than the Paying Bank or BOFD) that forwards a returned unpaid check or a notice in lieu of return.

Substitute Check: A paper reproduction of the original check that:

1. Contains an image of the front and back of the original check;
2. Bears a MICR line containing all the information appearing on the MICR line of the original check, except as provided under generally applicable industry standards for substitute checks to facilitate the processing of substitute checks (regulations may contain exceptions);
3. Conforms, in paper stock, dimension, and otherwise, with generally applicable industry standards for substitute checks; and
4. Is suitable for automated processing in the same manner as the original check.

Also called Image Replacement Document (IRD): This term is used by the Accredited Standards Committee in the technical specification for substitute checks (X9.90).

Truncate: To remove an original check from the forward collection or return process and send to a recipient, in lieu of such original check, a substitute check or, by agreement, information relating to the original check.

Truncating Bank: The Bank that truncates the original check. Also called: Converting Bank, but this is not the preferred term. See Truncate

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