Agencies Request Comments on Ways to Address Check and Payment Fraud
In response to a significant increase in check and payment fraud, the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (Board), and the Office of the Comptroller of the Currency (OCC) (agencies) published a request for information in the Federal Register on June 20, 2025, to help the agencies explore ways they can exercise their various authorities to mitigate these risks.1
The agencies noted these statistics on the increase in payment and check fraud:
- Losses for noncard payment fraud increased 271 percent between 2020 and 2024, according to the Federal Trade Commission.2
- The number of Suspicious Activity Reports (SARs) filed related to check, ACH, and wire fraud increased 489 percent between 2014 and 2024, according to the Financial Crimes Enforcement Network.3
- Check fraud in the United States has risen 385 percent since the COVID-19 pandemic, according to the Department of the Treasury.4
Regarding check fraud, checks can be stolen, altered, or forged. While products and services are available to detect altered or forged checks when processed, they have varying degrees of effectiveness. Another risk is that checks display the payor’s name, account number, routing number, address, and signature, which criminals can use to conduct other forms of payment fraud.
Payment fraud schemes can involve multiple institutions and payment methods, for which different federal and state agencies may have jurisdiction. As a result, no single agency or private-sector entity can address payment fraud on its own. But the agencies may be able to take action individually or working together to mitigate payment fraud. In addition, the Federal Reserve Banks may be able to further support the industry because of their role as payments system operator and payments improvement catalyst.
To inform their understanding of the issues and the actions that may be taken, the agencies requested comment on the following questions, by September 18, 2025:
Collaborating with Industry Stakeholders
1. What actions could increase collaboration among stakeholders to address payment fraud?
2. What types of collaboration, including standard setting, could be most effective in addressing payment fraud? What are some of the biggest obstacles to these types of collaboration?
3. Which organizations outside of the payments or banking industry might provide additional insights related to payment fraud and be effective collaborators in detecting, preventing, and mitigating payment fraud?
4. Could increased collaboration among federal and state agencies help detect, prevent, and mitigate payment fraud? If so, how?
Consumer, Business, and Industry Education
5. In general, what types of payment fraud education are most effective, and why? Would different audiences (for example, industry and consumers) benefit from different types of payment fraud education?
6. Would additional education informing consumers and businesses about safe payment practices be helpful to reduce payment fraud and promote access to safe, secure payment options?
7. Which approaches could make existing payment fraud education more effective? For example, would targeting outreach to particular audiences or conducting additional education in collaboration with other key stakeholders be effective?
Regulation and Supervision to Mitigate Payments Fraud
8. Are current online resources effective in providing education on payment fraud? If not, how could they be improved?
9. What potential changes to regulations (apart from the Board’s Regulation CC, discussed separately below) could address payment fraud and mitigate the harms from payment fraud to consumers, businesses, and supervised institutions?
10. The Board, FDIC, and OCC have issued supervisory guidance on numerous topics that relate to payment fraud detection, prevention, and mitigation. Is existing supervisory guidance related to payment fraud sufficient and clear? If not, what new or revised supervisory guidance should the Board, FDIC, and OCC consider issuing on this topic within the respective authorities?
11. How might new or revised supervisory guidance assist small community banks in detecting, preventing, and mitigating payment fraud?
12. What is the experience of consumers and businesses when supervised institutions place holds on depositors’ funds because of suspected payment fraud? (Regulation CC’s ‘‘reasonable cause to doubt collectability’’ exception is discussed separately below.)
(a) For instance, how frequently are consumers and businesses affected by holds, delays, or account freezes, and how responsive are supervised institutions to inquiries from consumers and businesses regarding these issues?
(b) Do current disclosure requirements effectively address consumer and business concerns when supervised institutions hold customer funds due to suspected payment fraud? For example, should changes be considered with respect to permissible customer communications under SAR confidentiality rules?
13. The Board, FDIC, and OCC have received complaints from supervised institutions regarding challenges in resolving disputes about liability for allegedly fraudulent checks. What is the experience of supervised institutions when trying to resolve these types of interbank disputes regarding allegedly fraudulent checks? Do these types of interbank disputes arise more frequently in connection with certain types of checks or parties? What actions could the Board, FDIC, and OCC consider, including potential amendments by the Board to Regulation CC, that could improve supervised institutions’ ability to resolve interbank disputes over liability for allegedly fraudulent checks?
14. Regulation CC seeks to balance prompt funds availability with the risk of checks being returned unpaid for reasons that include fraud. What potential amendments to Regulation CC would support timely access to funds from check deposits while providing depository institutions with sufficient time to identify suspected payment fraud?
(a) Have technological advancements in check processing reduced the time it takes for depository institutions to learn of nonpayment or fraud such that funds availability requirements for local checks and nonproprietary ATMs should be shortened?
(b) What effects would shortening funds availability requirements have on payment fraud, consumers who rely on timely access to funds, and depository institutions?
(c) Are there any changes the Board should consider to the expeditious return requirement to better balance providing expeditious notice to the receiving depository institution with ensuring adequate time for the paying depository institution to investigate potentially fraudulent checks?
15. Regulation CC provides six exceptions that allow depository institutions to extend deposit hold periods for certain types of deposits, including deposits for which the depository institution has reasonable cause to doubt the collectability of a check. Is this exception effective in allowing depository institutions to mitigate check fraud while also allowing timely access to funds? Would depository institutions benefit from further clarification on when it may be appropriate to invoke this exception? What are the experiences of businesses and consumers when depository institutions invoke this exception in order to delay the availability of depositors’ funds?
Payments Fraud Data Collection and Information Sharing
16. Broadly, how could payment fraud data collection and information sharing be improved?
17. What barriers limit the collection and sharing of payment fraud data between industry stakeholders, and how could these barriers be alleviated? For example, have specific barriers limited development of solutions or participation in bilateral or multilateral payment fraud data collection and information sharing? What changes would address these barriers?
18. What role should the Federal Reserve System, FDIC, or OCC take in supporting further standardization of payment fraud data? For instance, can the System better leverage or improve the FraudClassifier and ScamClassifier models?
19. What types of payment fraud data, if available, would have the largest impact on addressing payment fraud? If these data are not currently being collected or shared, what entities are best positioned to collect and share such data?
20. Is there a need for centralized databases or repositories for the sharing of payment fraud data across entities? What legal, privacy, or practical risks and challenges could such a centralized database or repository pose? Which entities are best positioned to develop and participate in a centralized database or repository?
Federal Reserve Bank Tools and Services to Reduce Payments Fraud
21. How can the Reserve Banks enhance their existing risk management tools and services, operations, rules, or procedures to better meet the needs of participating financial institutions in addressing payment fraud? For example, should the Reserve Banks consider requiring fraud reporting for payment rails (as they already do for the FedNow Service) or adopting any particular payment fraud standards?
22. Are there risk management tools or services that the Reserve Banks should consider offering or expanding, such as (a) developing a payment fraud contact directory for financial institutions, (b) offering tools that can provide notification of atypical payment activity, or (c) introducing confirmation of payee services to help mitigate fraudulent payment origination?
23. What types of payment fraud have most impacted your organization and its stakeholders? What tactics have criminals employed when perpetrating these types of payment fraud?
24. What measures, including technological solutions or services, have been most effective in identifying, preventing, and mitigating payment fraud at your institution? Are there actions that consumers can take that help institutions? For example, do financial institutions find it helpful when consumers alert the institution in advance when making large purchases, transferring large amounts of money, and traveling abroad?
25. To the extent not already addressed here, are there other actions that would support stakeholders in identifying, preventing, and mitigating payment fraud?
26. Are there specific actions that commenters believe could encourage the use of payment methods with strong security features?
Comments can be submitted electronically or by mail:
- https://www.regulations.gov/commenton/OCC-2025-0009-0001
- Chief Counsel’s Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 7th Street SW Suite 3E-218, Washington, DC 20219
ENDNOTES
1 90 FR 26293 (June 20, 2025).
2 90 FR at 26295, footnote 3.
3 90 FR at 26294, footnote 4.
4 90 FR at 26295, footnote 5.