Source: Federal Reserve Banks
The Federal Reserve Banks today announced changes to their check operations as consumers and businesses continue the shift from using paper checks toward electronic payments.
As part of a longer-range strategy, the Federal Reserve Banks have selected Philadelphia, Cleveland, Atlanta and Dallas as regional check processing sites that are expected to provide the full range of check processing services through at least mid-2011. Other remaining sites will have their operations scaled back. These scaled-back sites will all print substitute checks, but some will also capture paper checks. The regional sites will provide a full range of check processing services and receive processing volumes from the other sites in a phased transition.
These changes are expected to begin in 2008, and the Reserve Banks will continue to review this check infrastructure annually to respond to further change within the nation's payments system and to meet statutory requirements for long-term cost recovery.
"These changes will enable the Reserve Banks to continue to provide high-quality check processing services to depository institutions throughout the country well into the future while further encouraging the use of electronics within the nation's check collection system," said Gary Stern, chairman of the Reserve Banks' Financial Services Policy Committee and president of the Federal Reserve Bank of Minneapolis. "At the same time, these changes will facilitate ongoing efficiency improvements for the Reserve Banks' check processing operations in line with the continuing shift in consumer and business preferences for electronic payments. In addition, these changes support our long-term business strategy to use the authority provided by Check 21 to collect more checks electronically, reducing the reliance on the physical transportation of checks."
Today's announcement marks the Reserve Banks' fifth annual review of their check infrastructure. Since 2003, the Reserve Banks have reduced the locations where they process checks from 45 to 22, with one other site (Nashville) scheduled to discontinue operations this summer. Three other sites previously scheduled to discontinue check operations (Helena, San Francisco and Kansas City) will remain as print-only sites.