Remote Deposit - Frequently Asked Questions

1. What is Check 21?
   “ Check 21” is shorthand for the Checking for the 21st Century Act, a new law that took effect in October 2004. Check 21 makes a ”substitute check” the legal equivalent of the original check. A “substitute check” couples the image of the original check with additional routing information. While Check 21 does not address check image formats or the electronic exchange and settlement of “substitute checks” rather than paper checks, Check 21 does make such image exchange and settlement possible by giving “substitute checks” the legal equivalency of the original checks they represent. Check 21 thus also makes possible a business’s ability to remotely and electronically deposit checks with its financial institution.
   
   
2. What is remote deposit?
   Remote deposit is a business customer’s ability to (1) capture the images and transaction information of checks accepted for payment and (2) deliver this information electronically to the financial institution in a format such that the checks can be processed as if the items had been physically received and captured. These electronic items can then be delivered to other financial institutions via an approved file format.
   
   
3. How does the system handle fraudulent checks? Does Check 21 put our bank at a higher risk for fraud?
   The ability for any company to accept or create a fraudulent check and then deposit that check with the company’s financial institution is no different, regardless of how the check is captured or deposited. Goldleaf’s system excludes the capture and deposit of duplicate checks, but a financial institution’s ability to detect fraud and to charge back for returned items is no different in a paper environment than in an image environment.
   
   
4. How can remote deposit enable my bank to increase commercial business?
   Two of the biggest issues facing financial institutions that cater to business customers are the business’s distance from a branch and the timeframe in which checks are required to be delivered to a financial institution so that a deposit is posted the same business day. Both of these issues are addressed with remote deposit. Not only are the transportation problems solved if remote deposit is used, but since a deposit can be sent electronically, a company can submit items right up to the stated deadline for an electronic file to be collected by the financial institution.
   
   
5. Does my financial institution or my commercial customer have to buy any additional hardware or software to start using Goldleaf’s Remote Deposit?
   If you are a financial institution that already has Goldleaf Client and you have business customers that are already using a check scanner for conversion of checks into ACH items, once you license the Remote Deposit Module of Goldleaf Client, no additional hardware is necessary. Your customers can use the same compatible scanner hardware for ACH check conversion and for remote deposit.
   
   
6. Does my business customer have to use a Goldleaf-compatible scanner to participate in Remote Deposit?
   Any customer that wishes to capture check images for Remote Deposit must have a Goldleaf-compatible scanner or be able to create an approved check image file suitable for loading into Goldleaf Client for pickup by the financial institution. Goldleaf will accept an X9.37-formatted file that has been created by any system that a business customer chooses to use. X9.37 files are securely transmitted to the financial institution and picked up according to the schedule specified by the financial institution.
   
   
7. What is an X9.37-formatted file, and does my bank have to create it or accept it?
   The X9.37 format has been approved by the Federal Reserve Bank for combining check images and related check information into a single file. The X9.37 file should be supported by all check processing vendors and third-party services.
   
   
8. What type of training is involved to educate my financial institution employees and/or my commercial customers on how to use Goldleaf’s Remote Deposit?
   Goldleaf has both marketing support and educational offerings to provide our customers with the most comprehensive method of instructing business customers on the benefits of and procedures for using Remote Deposit. All Goldleaf customers will benefit by taking online classes through Goldleaf’s Web conference facility. Check 21 and Remote Deposit classes are offered regularly.
   
   
9. If my financial institution has chosen a wait-and-see approach to Check 21, can we still take advantage of Goldleaf’s Remote Deposit?
   Yes! Even if you are not going to participate in delivering or receiving images with other financial institutions, you can still offer Remote Deposit to your best business customers. Although you will need to create “image replacement documents” (IRDs) for the items you receive via Remote Deposit, the cost of doing so may be much less than the cost of losing a valuable business customer to an aggressive competitor that is offering a remote deposit alternative.
   
   
10. What does my customer do with the paper checks that have been captured and submitted as a remote deposit?
    The paper items can be held for a period of time (in case the customer has a return and needs the original item), but eventually they will need to be destroyed. The checks should not be disposed of without shredding or other similar method due to the confidential information contained on the checks.