The Treasury Department’s Bureau of the Fiscal Service will implement a new payee name validation capability within its Treasury Check Verification System application programming interface on Monday, Nov. 18, according to a notice from the bureau. The change comes roughly a year after regulators tightened liability standards for Treasury check returns.
TCVS is a tool that assists financial institutions with Treasury check verification. It is available through a secure application programming interface and a public-facing website. Payee name access will be available only through the interface and not the website, according to the bureau.
The Treasury Department last year released a final rule tightening the circumstances in which financial institutions will be liable if they pay canceled Treasury checks without waiting to receive the return information that would let them know if the checks were canceled. The department originally considered mandating that institutions use TVCS for verification, but that proposal was dropped after the American Bankers Association and other industry groups warned the mandate would be burdensome for some banks. However, the groups also recommended adding a “payee name” field to TCVS to mitigate fraud risk, which the new validation capability implements.
