Federal Reserve and SVPCo Collaborate

Today, Feb 2004

In the wake of the recently signed Check 21 law, Federal Reserve Banks and SVPCo have agreed to support the exchange of digital check images. The agreement is expected to achieve cost efficiencies and enable financial institutions of all sizes to exchange check images via SVPCo's Image Exchange Network.

Check 21 provisions go into effect in late October of 2004. Check 21 gives substitute checks the same legal status as the original item; allowing banks to send check images electronically across the country without requiring physical presentment of the original item. The Reserve Banks processed over 16 billion checks in 2002. SVPCo is a bank-owned private-sector provider of electronic payment services, primarily ACH, ECP and image. SVPCo participating banks represent more than 65% of the 42 billion checks written in the US annually. The Reserve Banks will be among the first to utilize the Image Exchange Network in 2004 to reach SVPCo participants. SVPCo will begin sending images through the Federal Reserve to reach other financial institutions.