Fed seeks feedback on potential changes to check services 

The Federal Reserve Board requested public input on check usage and the impact of potential strategic changes to check services provided by the Fed. 

Background: The reserve banks offer check collection and processing services at a fee. Amid declining check use, the Fed said the reserve banks will need to make substantial investments in their check infrastructure to continue providing the same level of check services going forward. 

Request for Input: The Fed board is seeking input on potential future changes to check services, including: 

• Foregoing investments in the reserve banks' check infrastructure to keep operating costs at existing levels with reduced reliability of check services over time. 

• Investing in the reserve banks' check infrastructure to maintain and potentially improve check services with higher operating costs. 

• Significantly reducing or winding down check services. 

Bowman Opposition: In a statement, Fed Vice Chair for Supervision Michelle Bowman said she cannot support the request for information, which she said seems to favor the discontinuation of check services by the reserve banks. She said that while fraud is a critical issue in the U.S. payments system that warrants ongoing attention, checks remain important payment mechanisms for consumers and businesses. 

Deadline: Comments on the preliminary request for input are due within 90 days of publication in the Federal Register. ICBA is reviewing the RFI and will submit comments. 

Check Fraud Resources: Amid the dramatic rise in check fraud, ICBA continues to encourage community banks to use:   

• The Treasury Department’s Treasury Check Verification System to catch canceled, duplicate, or other problematic Treasury checks at the time of presentment.  

• Nacha’s ACH Contact Registry, which includes thousands of check contacts.    

• ICBA’s customizable news release via ICBA’s Marketing Resource Center and check fraud prevention flyer to distribute to customers.    

• Community banker resources on the ICBA website, including ICBA guides on check fraud and online fraud courses.    

• ICBA Community’s Fraud subgroup, which includes more than 1,200 members dedicated to discussing fraud.    

• ICBA’s Solutions Directory to identify payments, compliance, and security service providers dedicated to community banks.  

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