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

Eliminating paper checks from government disbursements will reduce fraud and speed up the delivery of payments to recipients, three bank groups told the Treasury Department Monday (June 30).

The Bank Policy Institute, The Clearing House Association and the Consumer Bankers Association said this in joint comments submitted in response to the Treasury Department’s request for information related to the implementation of President Donald Trump’s executive order on modernizing payments, according to a Tuesday (July 1) press release.

“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 bank groups wrote in their joint comments. “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 groups wrote that check fraud accounted for 32% of all fraud losses in 2024 and that Treasury checks in particular are frequent targets for fraudsters.

To implement the payment modernization goals of the executive order, the groups suggested that the Treasury Department launch a public awareness campaign to promote electronic payments, expand the government’s use of existing secure electronic payment platforms, invest in fraud detection and prevention tools, limit exceptions to electronic payments and study why some consumers still prefer paper checks, per the release.

Early Warning Services, the company behind the peer-to-peer network Zelle, also submitted a comment letter Monday responding to the Treasury Department’s request for information, according to a Monday press release.

The company outlined the benefits it said Zelle can provide Treasury to support the transition to electronic payments, including scale, security, safety and speed.

“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, general manager of Zelle, said in the release.

The executive order signed by Trump on March 25 requires that the federal government stop issuing paper checks for disbursements, effective Sept. 30, and stop accepting them for payments “as soon as practicable.”

At that time, the federal government will switch to electronic payments, according 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 said.

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