The Consumer Bankers Association, the Bank Policy Institute and The Clearing House Association recently sent a letter to the U.S. Department of the Treasury urging prompt action to minimize the use of checks and fully transition to modern electronic payment methods.
“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 letter said. “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.”
In 2024, check fraud accounted for approximately 32 percent of fraud losses, according to Federal Reserve data. Mail theft resulted in $688 million in losses from February to August 2023, according to a FinCEN study, with treasury checks a frequent fraudster target. Older generations prefer checks.
The organizations recommend the treasury study government payment data to better understand why some consumers still rely on paper checks, invest in fraud detection and prevention tools, limit exceptions to electronic payments, expand the government’s use of existing secure electronic payment platforms, and launch a public awareness campaign to educate consumers on the speed, simplicity and security of electronic payments.