The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association have jointly submitted comments to the U.S. Department of the Treasury. These comments urge a swift transition from paper checks to electronic payment methods. This move is in response to a Treasury request for information related to the Executive Order on Modernizing Payments.
"Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses to the federal government and financial institutions," stated the groups in their letter. They further noted that phasing out paper checks presents "a critical opportunity to modernize America’s payment infrastructure, reduce fraud and increase financial security for American taxpayers."
Data from 2024 indicates that check fraud constituted about 32% of all fraud losses, as reported by the Federal Reserve. A study by FinCEN highlighted that mail theft alone led to $688 million in losses between February and August 2023. Fraudsters frequently target Treasury checks due to their high volume issuance and regulations mandating next-day fund availability after deposit.
The associations offered several recommendations to achieve modernization goals set by the Executive Order. These include launching a public awareness campaign about electronic payments' benefits, expanding secure electronic payment platforms usage like The Clearing House's ACH service and Zelle's Disbursements, investing in fraud detection tools, limiting exceptions for electronic payments, and studying why some consumers still rely on paper checks.
For further details or inquiries, contact Austin Anton at Bank Policy Institute (austin.anton@bpi.com), Weston Loyd at Consumer Bankers Association (wloyd@consumerbankers.com), or Gregory MacSweeney at The Clearing House Association (gregory.macsweeney@theclearinghouse.org).
The Bank Policy Institute represents various banks operating in the United States and focuses on regulatory analysis and advocacy regarding cybersecurity and other issues. The Consumer Bankers Association promotes policies benefiting America's retail banks since its establishment in 1919. Meanwhile, The Clearing House operates significant U.S.-based payments networks, clearing over $2 trillion daily through various services.