The Federal Reserve will spend $137.7 million running its check-clearing business next year and expects to bring in $110.8 million. The Reserve Banks' check services will recover 78.9 per cent of their costs in 2027, the Federal Reserve Board said on 12 November 2026, down from 94.5 per cent forecast for this year and 99.6 per cent in 2025.
The gap is the reason for a set of fee rises and service cuts in the Board's 2027 price notice. Check fees paid by banks and credit unions will rise 5.4 per cent on average, one fee will triple, and from May the Reserve Banks will process checks for fewer hours at weekends and close on holidays. The Board says none of this changes anyone's ability to write or receive a check.
Why is the Fed raising check fees?
Because volume is falling and the systems need money. Total forward check volume through August was 8.7 per cent below the same period last year, and the Reserve Banks expect it to end 2026 down 8.1 per cent, against a budgeted 6.0 per cent, according to the Federal Register notice. At the same time, expenses will rise $26.9 million, or 24.3 per cent, in 2027 because of "necessary investments to maintain the reliability of their core check-processing capabilities," the notice says.
Under the Monetary Control Act, the Reserve Banks must set fees that recover, over the long run, the costs of their priced services, including the profit a private business would have earned. Across all its priced services it expects to do so in 2027, recovering 101.5 per cent, with prices up 1.4 per cent on average. Checks are the exception, and the only service it expects to fall short.
The specific increases are steep in percentage terms and small in cents. The FedReceipt item fee rises from $0.0005 to $0.0015 for forward and return items, an increase of 200 per cent. Fees for reject repair, premium delivery, image archives and return reclearing rise about 20 per cent. A manual FedImage request goes from $10.00 to $12.00, and the daily return-reclear fee from $12 to $15. Presentment Point services, which the notice says have fewer than 50 users and no volume since 2013, will be retired.
How far has check use fallen?
By more than four-fifths at the Fed. We pulled the Federal Reserve's annual check statistics, which count commercial checks collected through the Reserve Banks.
| Year | Checks (millions) | Value ($ billions) | Average check ($) |
|---|---|---|---|
| 1999 | 17,075 | 13,788 | 807 |
| 2005 | 12,228 | 15,685 | 1,283 |
| 2010 | 7,712 | 8,825 | 1,144 |
| 2015 | 5,452 | 8,109 | 1,487 |
| 2020 | 3,767 | 7,875 | 2,091 |
| 2024 | 2,978 | 8,173 | 2,745 |
| 2025 | 2,796 | 8,133 | 2,908 |
| First half 2026 | 1,295 (down 8.0%) | 3,901 | about 3,010 |
Volume fell 83.6 per cent from 1999 to 2025. Value fell 41.0 per cent. The checks that remain are larger: the average rose from $807 to $2,908, a sign that small everyday payments have moved elsewhere while larger ones still go by check. India's instant-payment network, by comparison, handled 24.5 billion payments in August alone. Nationally, the number of checks written fell from about 40 billion in 2000 to about 9 billion in 2024, the notice says, citing the Fed's payments study.
What does a check cost the Fed to handle?
More each year, on our arithmetic. Check services revenue of $108.6 million in 2025 works out to about 3.9 cents for each of the 2,796 million checks collected, although the revenue also covers returns, image services and other fees. If volume falls 8.1 per cent in 2026, as forecast, and by the same rate again in 2027, the Fed would handle about 2,360 million checks next year. Spread across them, $137.7 million of expenses comes to about 5.8 cents a check, against revenue of about 4.7 cents. That is our illustration, not a Fed figure, and the 2027 volume is our assumption.
What did the Fed decide about its role?
To stay in, for now. The Board asked for comment in December 2025 on the future of the Reserve Banks' check services and received more than 330 unique comments. Commenters said checks still meet needs other payments do not, such as the memo line and legal requirements to pay by check, and that smaller banks rely on the Fed as a neutral provider. There was "limited support for any substantial or rapid wind down," the notice says. The Fed will keep core check processing, simplify paper handling and raise fees regularly.
From May 2027, check processing will open on Sunday at 7:00 p.m. Eastern instead of 2:00 p.m. and close on Saturday at 4:00 a.m. instead of 10:00 p.m., stretching the weekend maintenance window from 16 hours to 39. The Reserve Banks will also close for holidays.
What to watch
The Board said it will "reassess the appropriate nature and scope of the Reserve Banks' role in check processing" if cost recovery does not improve, and would seek public comment before any change with significant long-run effects. The 2026 cost-recovery outcome, due with next year's notice, is the first test. Banks, already spending to hold on to deposits, will decide whether to pass the higher fees on to the customers who still deposit checks.
The 2027 fees, cost-recovery figures, volume forecasts, processing-window changes and the account of the 2025 request for information are from the Federal Reserve Board's announcement and Federal Register notice of 12 November 2026. Annual and quarterly check volumes and values are from the Federal Reserve's commercial check collection statistics, retrieved on 13 November 2026. The figure for checks written nationally is from the notice's citation of the Federal Reserve Payments Study. Percentage changes, revenue per check and the 2027 cost-per-check estimate are this publication's arithmetic. The analysis is our own.
Topics moneypaymentsFederal Reservebanks
