Bank Groups Suggest Public Awareness Campaign to Support US Treasury’s Phaseout of Paper Checks | PYMNTS.com

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Eliminating paper checks from authorities disbursements will scale back fraud and velocity up the supply of funds to recipients, three financial institution teams advised the Treasury Department Monday (June 30).

The Bank Policy Institute, The Clearing House Association and the Consumer Bankers Association stated this in joint feedback submitted in response to the Treasury Department’s request for info associated to the implementation of President Donald Trump’s government order on modernizing funds, in accordance to a Tuesday (July 1) press launch.

“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 financial institution teams wrote of their joint feedback. “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.”

The teams wrote that test fraud accounted for 32% of all fraud losses in 2024 and that Treasury checks particularly are frequent targets for fraudsters.

To implement the fee modernization targets of the manager order, the teams urged that the Treasury Department launch a public consciousness marketing campaign to promote digital funds, develop the federal government’s use of present safe digital fee platforms, spend money on fraud detection and prevention instruments, restrict exceptions to digital funds and examine why some shoppers nonetheless choose paper checks, per the discharge.

Early Warning Services, the corporate behind the peer-to-peer community Zelle, additionally submitted a remark letter Monday responding to the Treasury Department’s request for info, in accordance to a Monday press launch.

The firm outlined the advantages it stated Zelle can present Treasury to assist the transition to digital funds, together with scale, safety, security and velocity.

“Our payments infrastructure is deeply integrated within the banking system, widely available and can scale quickly, making us uniquely positioned to support Treasury’s push to modernize government disbursements,” Denise Leonhard, common supervisor of Zelle, stated within the launch.

The government order signed by Trump on March 25 requires that the federal authorities cease issuing paper checks for disbursements, efficient Sept. 30, and cease accepting them for funds “as soon as practicable.”

At that point, the federal authorities will swap to digital funds, in accordance to the order.

“This order promotes operational efficiency by mandating the transition to electronic payments for all Federal disbursements and receipts by digitizing payments to the extent permissible under applicable law (but not, for avoidance of doubt, to establish a Central Bank Digital Currency),” the order stated.

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