The Federal Reserve is seeking public input on potential changes to the check services it provides, although support for the request is not unanimous among Fed board members.
Federal Reserve Banks offer check collection and processing services at a fee to banks and credit unions. But according to an announcement, check use has steadily declined, digital payment methods have grown in use, check fraud has risen, and Reserve Banks will need to make substantial investments in their check infrastructure to continue providing the same level of check services going forward.
The Fed is seeking input on potential future changes to check services with varying effects on the level of services offered and their costs. As examples, it listed three possible future changes:
- Foregoing investments in its check infrastructure to keep operating costs at existing levels with reduced reliability of check services over time;
- Investing in check infrastructure to maintain and potentially improve check services with higher operating costs;
- Significantly reducing check services, or alternatively, substantially winding them down, both resulting in reduced operating costs.
Comments on the request are due 90 days after publication in the Federal Register.
In a statement, Fed Vice Chair for Supervision Michelle Bowman said she could not support the request for information as written, as it “seems to favor the discontinuation of check services by Reserve Banks, even while checks remain an important payment mechanism.”
“The materials note that in 2021, about 11 billion checks were written, and while they accounted for approximately 5% of the overall noncash payments, they represented about 21% of noncash payments value,” Bowman said. “Checks remain important payment mechanisms for consumers and businesses.”
In related news, the Fed also announced 2026 pricing for payment services that Reserve Banks provide to banks and credit unions, such as the clearing of checks, automated clearing house transactions, instant payments, and wholesale payment and settlement services. Overall, price changes for 2026 will result in an estimated 0.9% average price increase for established, mature services.
