handing-over-check
The Federal Reserve is asking the public and the financial industry to weigh in on the future of its check-processing operations, issuing a sweeping Request for Information (RFI) that signals possible major changes to how checks move through the U.S. payments system.
The RFI, published this week, seeks comment on whether the Federal Reserve Banks should continue offering check services in their current form, scale them back, invest heavily to modernize infrastructure, or begin winding them down as check usage steadily declines. Feedback is due by March 9, 2026.
Check use has dropped from more than 40 billion annually in 2000 to roughly 11 billion in 2021, even as the value of check payments remains significant, more than $27 trillion. The Fed notes that maintaining aging check-processing infrastructure will soon require substantial investment, costs that must be recovered through fees charged to financial institutions under the Monetary Control Act.
At the same time, check fraud has surged, with potentially fraudulent returns rising from 10.2% in 2018 to 15% in 2021.
The Fed is considering strategies ranging from minimal maintenance, which would lead to deteriorating service levels, to a full wind-down of check services. Another option would be targeted upgrades to preserve current reliability while supporting industry efforts to bolster check security.
The central bank is also asking whether communities, particularly rural, low-income and elderly populations that rely more heavily on checks, would accept higher costs to preserve the system.
All comments will be made public on the Fed’s website as policymakers weigh the long-term future of one of the nation’s oldest payment rails.
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