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February 2026 • Issue 26:02:02

Fed rethinks its role

in check clearing system

Dependance on checks still strong

While that is a significant decline from 13 billion in 2018 and
40 billion at the turn of the century, checks still represent
substantial volume and value. The average check in 2023
totaled $2,685, according to the Fed. Though checks account
for only 5 percent of noncash transactions, they represent
21 percent of noncash payment value.

As Fed Vice Chair Michelle Bowman wrote in a statement
accompanying the Fed's RFI, "Checks remain important
payment mechanisms for consumers and businesses."
Bowman was the lone vote among members of the Fed
Board of Governors against the RFI.

David Walker, a consultant who previously led the
Electronic Check Clearing House Organization (ECCHO),
By Patti Murphy stated during an interview that the total value of checks
cleared in the United States rivals the nation's GDP. Fed
he Federal Reserve is rethinking its role in data suggests the total value of check payments in 2021 was
the check payment system. But it looks like $27.23 trillion. That same year, U.S. GDP was $23 trillion.
public support is sparse. The Fed's Board of
T Governors issued a request for information (RFI) (In 2025, U.S. GDP was $30 trillion.)
in December 2025, seeking input on the impact of potential And the role of checks doesn't seem likely to change any
changes to check clearing and settlement services provided time soon. A recent survey by the Association for Financial
by the 12 Federal Reserve Banks.
Professionals found 91 percent of companies still use checks
for business-to-business payments; 75 percent of surveyed
The Federal Reserve Act of 1913 and the Monetary Control companies reported no plans to reduce check usage in the
Act of 1980 lay out the Fed's responsibilities for clearing near term.
and settling check payments. The Check Clearing for the
21st Century Act (commonly known as the Check 21 Act)
made important changes to how those responsibilities
were carried out, namely laying the foundation for clearing Contributed articles inside by:
images in lieu of paper checks.

During the 15 years since the Check 21 Act took effect, Allen Kopelman .....................................................................................16
electronic payments have chipped away at check usage.
Still, American consumers and businesses continue to rely Dale S. Laszig .........................................................................................25
on checks. In 2023, the most recent year for which data is Ken Musante ..........................................................................................26
available, 3.3 billion checks cleared through the Fed and
between banks. Zachary Held ..........................................................................................28
Viktoria Soletsz ......................................................................................30

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