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Mix Magazine

This installment of The Bitstream column appeared in the October 2004 issue of Mix Magazine.

The Bitstream

This column is Part Six of a multipart glossary of computer terms for content creators…

Pedants In A Big Box — Part Six

Go to the glossary


Show Me The (Virtual) Money or, Is Digital As Good As Analog?

While writing this month’s column, I received a notice in my monthly bank statement. It informed me that, as of October 28th, 2004, the Check Clearing for the 21st Century Act takes effect. Since you may have received a similar insert, I thought it was a timely, real world case of information technology impacting your daily life. So, let’s take a look at what’s going on, behind the scenes, with your precious moolah…

My local Bank of the West, the North Beach branch of a really great regional banking corporation, had begun the adoption of this paperless system. According to the insert, “…It is intended to improve the efficiency and reliability of the nation’s check payment system.” The act was signed into law on October 28, 2003 and, according to the Federal Reserve Board’s web site,“…is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation.” Check truncation is the now common practice of digitizing a check on its way to clearing, so that the paper version can be retired and the electronic facsimile can be forwarded on to the paying institution.

“Check 21,” as the law is known, facilitates check truncation by creating a new negotiable instrument called a “substitute check” which, the Fed says, would permit banks to truncate the original, “…process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks.” Though the law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the act to create substitute checks, it does codify that “…a substitute check would be the legal equivalent” of the original. In other words, the digitized version is just fine by us, thank you very much.

Bank Of The West hopes that “Check 21 will reduce the time and cost of transporting billions of paper checks between banks. It will also reduce the vulnerability of the check payment systems to disruptions, such as extreme weather and natural disaster…” or terrorist threats. After all, this initiative was signed into law by our very alarmist Chief Executive. Humm, something beneficial for a change…


OMas spent a good part of this past month marveling at the incredible plasticity of the human mind. This column was written while under the hypnotic influence of my new Dyna-Flex gyroscopic exerciser and the addictive, slightly country grooves of the Cardigans’ Long Gone Before Daylight on Koch.