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Check and Pen

The Fed provides check collection services to financial institutions and works with customers to improve check processing nationwide.

The Federal Reserve System provides check collection services to banks, savings and loans, and credit unions. Over the years, the Fed has also worked with financial institutions to improve the efficiency and cost-effectiveness of the check collection system as a whole.

While cash is convenient for small-dollar transactions, checks or electronic funds transfers are generally used for larger-value transactions. However, the number of checks written nationally has declined since the mid-1990s. The use of electronic payment instruments has grown, and the Check Clearing for the 21st Century Act (About Check 21) removed barriers to the electronic collection of checks.

As a result, the majority of checks processed by the Fed are deposited and presented electronically, decreasing the need for check-processing infrastructure. For example, the Federal Reserve Bank of Richmond closed its five processing centers between 2004 and 2009, and its Check Adjustments operation in October 2009.

Today, the Federal Reserve Bank of Atlanta handles physical and electronic check processing and related check adjustments for all Reserve Banks.

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