By Paul Benda and Hannah Ibberson
While the Trump administration has directed Treasury to significantly reduce the volume of Treasury checks in the coming months, modernization is still some distance off and will ultimately depend on how many exemptions are permitted.
For example, despite Treasury’s laudable effort to make Social Security payments electronically, the government is still issuing hundreds of thousands of paper checks just for Social Security beneficiaries. So we know Treasury checks are likely to be around at a significant volume for a while.
Most bankers who deal with U.S. Treasury checks know about the Treasury Check Verification System. It’s a mechanism for verifying Treasury checks online; anyone can check them by entering the amount and the check number. However, until recently, this system did not verify the name of the payee, which criminals took advantage of by washing or reproducing them with different names.
Having counterfeit checks that passed TCVS verification can be costly to banks. To address this, Treasury created a verification system with restricted access requiring an API. ABA volunteered to be a service provider for banks and provide access via the API as a free service for our members. Treasury quickly approved our application, and our team got on building the connection.
Earlier this year, ABA made this access live to bank members through aba.com/tcvs. Anyone from an ABA member bank can access the TCVS portal, which is currently configured to verify single checks. Some banks have access managed by their central fraud teams, and others have deployed TCVS access at the teller level to validate a Treasury check when it’s presented at the branch. It’s up to the banks to figure out how they want to deploy this tool.
In the first six weeks of public access, hundreds of banks had checked nearly 7,000 checks — and by July, banks were verifying $20 million worth of Treasury checks per day.
In addition to giving their employees access to ABA’s TCVS portal, many banks are pushing their tellers to get aba.com accounts to access free-to-members ABA Frontline Compliance Training, which includes courses on check fraud. ABA also offers a check fraud toolkit and the ABA Fraud Contact Directory, which includes inside contact info for fraud claims for half of all banks in the U.S., as well as credit unions — because when it comes to stopping fraud, time is of the essence.
With our TCVS access along with ABA’s other anti-fraud resources — and more in the pipeline — bankers can make a material impact on the flow of funds to criminals, and save their banks and their customers a lot of money.
This article is adapted from a recent ABA Fraudcast episode.
Paul Benda is EVP for risk, fraud and cybersecurity policy at ABA. Hannah Ibberson is a program manager at ABA where she works on ABA’s TCVS portal.
