The Federal Reserve:

Information on the System's Check Collection Service

GGD-90-17: Published: Dec 15, 1989. Publicly Released: Dec 15, 1989.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO reviewed the Federal Reserve System's check collection services, focusing on: (1) its banking operations compared to those in the private sector; (2) efforts to reduce its competitive advantage over private-sector banks regarding check presentment and associated fees; and (3) cost recovery activities and how proposed accounting changes might affect them.

GAO found that: (1) the Federal Reserve's mandated exemption from presentment fees on same-day payments gave it an unfair competitive advantage over private-sector banks; (2) the Federal Reserve Board of Governors was developing a payment proposal for extending same-day payment rights to the private sector, and was revising associated price and service procedures; (3) a proposed direct settlement service intended to equalize presentment practices would instead perpetuate the Federal Reserve's noncompetitive position by increasing private banks' dependence on its presentment services; (4) although some banking officials argued that charging higher presentment fees later in the day would increase check processing efficiency, presentment policy evaluation was a more feasible and equitable approach to improving check collection operations; (5) 7 of the 12 Federal Reserve banks did not fully recover collection costs in 1988, primarily because they did not anticipate the expense of instituting a mandated direct return service; and (6) the Federal Reserve revised its check counting methodology for imputing deposit insurance premium costs to make its procedures more comparable with private-sector banks'.

Oct 8, 2020

Jul 16, 2020

Mar 30, 2020

Mar 16, 2020

Dec 16, 2019

Oct 17, 2019

Aug 10, 2018

Jun 25, 2018

Mar 13, 2018

Looking for more? Browse all our products here