Fed Review of Check Services Raises Concerns Among Community Banks

Although paper checks are gradually being replaced by ACH transfers, cards and instant payments, they remain important to U.S. businesses, people aged 65 and older, rural communities, and low- and middle-income households. About 11 billion checks were written nationwide in 2021, accounting for 5% of noncash payments by volume but $27.23 trillion, or 21%, by value. Federal Reserve Banks still process nearly half of all U.S. checks, meaning any service changes could affect access to payments and the orderly functioning of the financial system.

The Federal Reserve Board launched a consultation on December 4, 2025, to assess four options: maintaining services with declining reliability, streamlining them, phasing them out, or investing in upgrades. The comment period ended on March 9, 2026. On March 6, the Independent Community Bankers of America responded on behalf of nearly 50,000 locations, arguing that at least the current scope and reliability of services should be maintained. The Fed has not proposed an investment amount or an exit date and has pledged to hold a separate consultation on any major plan.