WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with Better Markets’ comment letter to the Consumer Financial Protection Bureau (CFPB) supporting a petition for rulemaking to amend the Expedited Funds Availability Act (EFAA).
“In today’s world when retailers such as Amazon and Walmart regularly deliver a wide range of physical products to Americans’ homes and businesses within hours, there is no reason why banks still must delay the delivery of money deposited by checks for several days, especially since the money transfer process now occurs electronically and no longer requires the shipment of any physical paper checks around the country.
“The Fed’s latest data shows that each year more than 11 billion checks are written, deposited, and processed by banks and the Fed, for a total of more than $27 trillion. While both the number and dollar amount of check transactions are on the decline, checks remain a vital method of payment for Main Street Americans and small businesses. Delaying access to funds can be devastating for customers needing money from a deposited check. Nearly four in ten adults say they worry most or all of the time that they will not have enough money to pay bills. Many of these Americans end up choosing to pay a fee—often a large fee—to a check cashing service or payday lender that offers immediate access to money because the alternative of missing a rent payment or other bill is even more damaging. Consider that 70% of people who use check cashing services actually have bank accounts. These people are choosing to use a check casher—likely as a last resort—because the check casher offers faster access to their money than the bank.
“The Fed and CFPB should update and expedite the check-clearing process, as required by the EFAA. This will benefit Main Street Americans—particularly vulnerable, low-income consumers and small businesses—by reducing the delays in accessing money from check payments.”
You can find more information about these issues in our comment letter.
