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The United States Federal Reserve Banks plan to scale back check processing facilities sooner than originally planned, the Fed announced yesterday. By the end of 2009, the Federal Reserve Bank of Cleveland will be the only paper check processing and adjustment facility for the Fed's banking system. Eventually, the Federal Reserve Bank of Atlanta will be its only electronic check-processing site. The restructuring plan replaces a previous schedule the Fed announced in June 2007 (CardLine 6/27/2007). According to that plan, by 2011 the Fed's full-service check processing facilities would decrease from 22 to four locations: Atlanta, Philadelphia, Dallas and Cleveland. "Since that time, paper check volumes have declined significantly and no longer support the need for four full-service regional sites," the Fed said in a statement. The number of checks paid in the United States was 30 billion in 2006, down 19% from 37 billion checks in 2003, and down 29% from 42 billion in 2001, according to the Fed. The Fed already has closed three of the facilities. Some of the Fed's 19 remaining check-processing sites may continue to operate "for a period of time during the transition" as facilities that capture and print images and data from paper and electronic checks for further processing, the Fed says. Financial institution customers will receive at least 60 days' notice of any service changes, including shifts of processing operations to new locations. Almost all customers will begin receiving substitute electronic or replacement checks instead of original paper checks. Some 750 of the remaining 2,400 check processing staff will lose their jobs due to the restructuring, a Fed spokesperson tells CardLine. He says that when the restructuring is final, the Fed will employ only about 400 check processing staff members. The Fed counted some 4,500 employees at its check processing centers in 2003 when it first announced plans to restructure due to declining check use.
