Financial Update (First Quarter 2010)

Atlanta Fed Ceases Check Processing

The Atlanta Fed processed its last paper check on Friday, Feb. 26. All paper check processing for the Fed System will now take place at the Federal Reserve Bank of Cleveland. The Atlanta Fed will continue to process the System's electronic checks.

photo of Atlanta Fed employee Raphael Johnson
Atlanta Fed employee Raphael Johnson with the last check processed at the Atlanta Fed. The check was for $11.15.

Digitalization enhances efficiency
"The movement to a single paper check processing site is recognition of the industry's success in moving to more efficient electronic solutions for clearing checks," said Pat Barron, first vice president of the Federal Reserve Bank of Atlanta and the Retail Payments Office director. "The changes we have implemented to our paper check infrastructure position us well to continue to meet the needs of the nation's payments system. At the same time, [these changes] have been difficult for our organization as we have been required to reduce staff."

Checks' decline spurs consolidation
The Federal Reserve began consolidating its check processing infrastructure in 2003, driven by the rapid adoption of electronic check-clearing, the overall decline of check usage, and consumers' growing preference for credit and debit cards. Since the transition began, the number of paper processing sites has been reduced from 45 offices to a single site in Cleveland.

The Check Clearing for the 21st Century Act, widely known as Check 21, went into effect in October 2004. At the time Check 21 was implemented, 100 percent of the items processed by the Reserve Banks were in paper form. Now, nearly 99 percent are processed as images.

As one of the nation's largest interbank processors of electronic transactions, the Federal Reserve will continue to play an important role in the evolution of the nation's payment system.

March 26, 2010