The Clearing House Association and the Bank Policy Institute submitted a joint comment letter in response to the Federal Reserve’s Request for Information on the future of Reserve Bank check services, urging a clear, longer-term plan to transition the industry away from checks in favor of safer electronic payment alternatives. The letter highlights the accelerating decline in check usage, the sharp rise in check fraud, and the increasing operational and infrastructure costs associated with maintaining legacy check systems. It calls on the Federal Reserve to develop this plan in close collaboration with the private sector and other stakeholders and to consider establishing a target date to end Reserve Bank check services, providing a clear glide path for an orderly transition.

At the same time, the letter emphasizes that there is no private-sector substitute that can immediately replace the Federal Reserve’s nationwide role in check clearing, returns, and adjustments. Accordingly, during any transition period, the Federal Reserve must continue to provide reliable, nationwide check services to support end-to-end processing across forward collection, returns, information flows, and exception handling, including capabilities that help reduce fraud and resolve discrepancies. The letter also underscores the need for regulatory clarity, including how Regulation CC requirements will be met in a changing clearing environment, and calls for greater transparency on the scope, timing, and cost implications of necessary infrastructure investments so stakeholders can provide informed input. To read the full letter click here.