New York and Washington, D.C. – The Bank Policy Institute, The Clearing House Association and the Consumer Bankers Association submitted joint comments to the U.S. Department of the Treasury late yesterday urging prompt action to fully transition to secure, modern electronic payment methods and minimize the use of checks. The letter — submitted in response to a Treasury request for information relating to the Executive Order on Modernizing Payments — emphasized the importance of eliminating paper checks from government disbursements to reduce risk and ensure all recipients benefit from faster, more reliable payment delivery.

“Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses to the federal government and financial institutions,” the groups wrote. “Treasury's efforts to phase out paper checks in government payments represent a critical opportunity to modernize America's payment infrastructure, reduce fraud and increase financial security for American taxpayers.”

By the Numbers:

• Check fraud accounted for about 32% of all fraud losses in 2024, according to Federal Reserve data.
• Many of these checks are acquired through mail theft. According to a FinCEN study examining reports from February to August 2023, mail theft alone resulted in $688 million in losses.
• Treasury checks are frequent targets for fraudsters. The checks are issued in high volumes, and regulations generally require that funds from Treasury checks be made available the day after deposit.
• Older generations of Americans are more likely to prefer checks. One study found that each additional year of age increases the likelihood of preferring checks by about 0.5%.

Recommendations:
To achieve the Executive Order’s payment modernization goals, the groups recommend Treasury:

• Launch a public awareness campaign to educate consumers on the speed, simplicity and security of electronic payments.
• Expand the government’s use of existing secure electronic payment platforms, such as The Clearing House’s ACH service (the EPN® network) and Early Warning Service’s Disbursements with Zelle®, and other modern payment solutions, which are both secure and user-friendly.
• Invest in fraud detection and prevention tools, such as identity verification capabilities.
• Limit exceptions to electronic payments and continue to work with banks to detect counterfeit or altered checks.
• Study government payment data to better understand why some consumers still rely on paper checks.  

Read the full letter from The Clearing House Association, the Bank Policy Institute, and the Consumer Bankers Association here.

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About The Clearing House Association
The Clearing House Association L.L.C., the country’s oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the United States, clearing and settling more than $2 trillion each business day.

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

About Consumer Bankers Association
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on X @consumerbankers.

Media Contact:
Greg MacSweeney
The Clearing House
212-612-9282
Gregory.MacSweeney@theclearinghouse.org