Flexpower Inc. (FLXP)

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10.09.07Please answer the check 21 questionPosted in Announcements, Investor Relations at 7:56 pm by thamsgt

QUESTION:

As I have mentioned many shareholders don’t quite understand the check21 process can someone explain it in laymens terms………….Thanks.

RESPONSE:

“Check 21″ (Check Clearing for the 21st Century Act) is an U.S. federal law that became effective on October 28, 2004. It is designed to enable banks to handle more checks electronically, which should make check processing faster and more efficient.As of mid-2006, most banks physically moved original paper checks from the bank where the checks were deposited to the bank that paid them. This transportation can be inefficient and costly.

With check 21, the original checks are scanned (front and back) and then cleared electronically. This radically speeds up the check clearing process, as the paper checks no longer have to be transported, sorted, cleared, returned to the originating bank etc. Usually 80% of the funds of a check deposit are available to the depositor within 24 hours, and the remaining funds within 48.

If necessary, Check 21 allows for the creation of “Substitute Checks” from check images. These Substitute Checks are essentially a printout of the original check, have the same legal status can be processed in the same way.

For U.S. denominated checks that are deposited overseas, this increased efficiency is much more dramatic. A U.S. check deposited in China can take up to five weeks to clear. Check 21 will clear it in a fraction of that time. It therefore becomes a very valuable convenience for the party depositing the check, in exchange for a small service fee.