Fed proposes reduced check services
Source: “Fed proposes reduced check services”, Lynne Marek, Payments Dive, December 8, 2025.
- The Federal Reserve Board last week made a move toward potentially reducing the availability of check processing services that it provides to banks and credit unions, asking the public for input on what level of services are required. It’s also undertaking an analysis of the issue.
- “To help the Board understand stakeholder needs and balance tradeoffs as it considers the future of the Reserve Banks’ check services, the Board is seeking input on potential future changes to check services with varying effects on the level of check services offered and their costs,” a Thursday notice said.
- In a Thursday vote on whether to ask for public comment on the issue, the Fed board members voted six to one to ask the public for input on various possibilities. The Fed’s vice chair for supervision, Michelle Bowman, was the only member to vote against the proposal.
The Fed, which provides services for financial institutions’ processing of checks, is seeking input from the public, including the payments industry, as it weighs how much to invest in continuing to provide check processing services for the future. It laid out three potential scenarios to characterize its potential action in the face of recent declining use of paper checks by businesses and consumers.
The central bank said it could skip any investment in bolstering the check infrastructure and maintain its current operating costs, potentially precipitating declining reliability of processing services; invest in the check processing system to potentially improve the services, pushing operating costs up; or reduce check services and cut costs.
The Fed plans to use the feedback to consider possible strategies with respect to the check system, as well as potential effects, and to consider other possible steps, the request said.
