Although these laws typically allow banks to agree to alternative presentment arrangements, the large number of banks in the United States has made the widespread adoption of electronic check collection through agreement extremely difficult. The Federal Reserve worked with the banking industry, consumer groups, and legal experts to analyze these barriers to innovation and determine how best to address them.
The resulting legal innovation was the introduction of paper substitute checks that are legally equivalent to original checks, thereby allowing banks that choose to collect checks electronically to create and present substitute checks to paying banks that demand presentment by paper check. The resulting proposal was then presented to Congress and formed the basis of what became known as Check 21.