Key Messages: Paper checks are being transitioned to electronic images of checks at a pace that is unprecedented. Check images are currently collected in two forms, as substitute checks and as check images. Substitute checks assist in evolving traditional paper check clearing to image-based clearing. As a precursor to full check image exchange, the number of substitute checks is a positive indication of the acceptance of image exchange. Only 2 years after the effective date of Check 21, check payments totaling almost $8 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes. Based on the 2004 Federal Reserve Payments Study, that amount is much greater than the sum of all debit card payments ($.6 trillion) and all credit card payments ($1.7 trillion). The number of images received by paying banks exceeded the number of substitutes for the first time in the month of September The rate of growth in images is accelerating. The number of institutions participating in image-based clearing totals more than 5,500 (approximately 34% of all institutions) and many more can be expected to implement check image enhancements in the near future. This CheckImage Collaborative industry image clearing data reflects transactions settled through the Federal Reserve, NCHA and SVPCO and does not include duplicate counting. CheckImage Collaborative Communications Work Group

# Items in Millions Nov-05 Dec-05 Jan-06 Feb-06Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 # of Images & Substitute Checks Forward Collection Only Substitute Checks Images Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Across the 13 month period Image-based clearing volume grew from 51 to 440 million / mo or by 764% with 58.6% of the volume cleared by image in November The annualized Nov ‘06 volume = 5.3 billion items/yr. is approximately 14.7% of total check volume cleared. Data Sources: Transactions settled through the Federal Reserve, NCHA and SVPCO with no duplicate counting

$0 $100 $200 $300 $400 $500 $600 $700 Nov-05 Dec-05 Jan-06 Feb-06Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 $ Amounts in Billions $ Amounts of Images & Substitute Checks Forward Collection Only Nov $ Annualized = $7.5 Trillion Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects checks received by DFIs for payment from other DFIs or an intermediary. The dollar amount grew from $264 to $623 billion / mo or 136%. Annualized Nov ‘06 dollar amount = $7.5 trillion/yr. $7.5 trillion is 19% of the total dollars cleared via check and is greater than the sum of all debit card and credit card payments. Data Sources: Transactions settled through the Federal Reserve, NCHA and SVPCO with no duplicate counting

# of Receiving R/Ts 0 1,000 2,000 3,000 4,000 5,000 6,000 Nov-05 Dec-05 Jan-06 Feb-06Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 6,046 Receiving R/Ts Number of R/Ts Receiving Image Files Highlights: Chart reflects the number of paying bank R/Ts receiving check images. Most R/Ts through November 2006 were for individual institutions. The number of receiving R/Ts grew between Nov ’05 & Nov ‘06 from 2,567 to 6,046 or 136%. 6,046 routing transit numbers represent about 5,548 institutions. This means that approximately 34% of all U. S. institutions are receiving check images. Data Sources: Transactions settled through the Federal Reserve, NCHA and SVPCO with no duplicate counting

# Items in Millions Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Average # of Images /Day 12.3 Million Image / Day 5.8 Million Image / Day Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Volume more than doubled in 3 months – August (5.8) to November (12.3). Average daily image volume grew from.49 to 12.3 million or by 2,410% from Nov 2005 to Nov Data Sources: Transactions settled through the Federal Reserve, NCHA and SVPCO with no duplicate counting