Summary
The Federal Reserve is considering changes to its check-processing operations due to the decline in paper check usage. They have launched a 90-day period to gather public input on how much support banks and credit unions still need for check processing. The decision comes as electronic payments have increased, raising questions about investing in outdated check-processing systems.
Key Facts
- The Federal Reserve is asking for public feedback on its check-processing services.
- The use of paper checks in the U.S. has decreased significantly.
- By 2024, only 7% of household bills were paid by check compared to 19% in 2020.
- The Fed is weighing the option to reduce or possibly stop check-processing services.
- The call for public input was approved with one dissenting vote from Vice Chair Michelle Bowman.
- Bowman expressed concerns that the process seems biased toward ending check services.
- The federal government has moved away from using paper checks for payments like Social Security benefits.
- Rising mail theft and fraud with paper checks were cited as issues by the White House.
