Treasury Proposes New Rules That Would Largely Eliminate Government’s Use of Paper Checks

WASHINGTON — The U.S. Department of the Treasury is proposing new rules aimed at further reducing — and largely eliminating — the federal government’s use of paper checks, part of a broader push to shift all payments to electronic methods.

The proposed rule, published April 29 in the Federal Register, would update Treasury regulations governing federal disbursements to reinforce a transition to electronic payments such as direct deposit and prepaid debit options. 

Treasury said the changes are intended to improve efficiency, reduce costs and combat fraud tied to paper checks, while providing a more secure and convenient payment experience for recipients. 

Under the proposal, the government would move toward ceasing paper checks for federal payments “to the extent permitted by law,” while reviewing and tightening the standards for granting exceptions when electronic payments are not feasible. 

Proposal Follows Executive Order

The rule aligns with a 2025 executive order directing federal agencies to modernize payment systems and transition to electronic funds transfer for disbursements such as tax refunds, benefits and vendor payments, with only limited exceptions for hardship or access issues. 

Treasury officials have said the shift reflects a broader governmentwide effort to phase out paper-based processes. In fiscal 2025, about 96% of federal payments were already made electronically, underscoring the declining role of checks. 

The proposal also seeks public comment on updates to waiver policies that currently allow some recipients to continue receiving paper checks, including individuals without access to banking services. 

Comments on the proposed rule are due by June 15.