• Federal Reserve, OCC, and FDIC announce joint action to address rising payments fraud
  
• Focus includes paper check fraud and enhanced regulatory oversight
  
• Fed’s Michelle Bowman calls for broader collaboration with state agencies and law enforcement
  
• Proposal includes better data collection and new uses of Federal Reserve Bank tools
  
• Check fraud has grown significantly in recent years, harming banks and consumers
  
• Community banks seen as especially vulnerable to these attacks
  
• Federal agencies propose improved education and information sharing with industry
  
• President Trump previously mandated a federal stop to paper checks due to fraud risks
• Bipartisan Senate group is backing legislation to study and address payments scams
  
• Fraud threats now span both traditional checks and modern digital platforms

Amid mounting concern over payments fraud, three top US banking regulators have launched a joint initiative to tackle one of the oldest threats in the system – check fraud.

The Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) announced on Monday a coordinated effort to explore new approaches, gather industry feedback, and enhance supervisory practices around rising fraud incidents.

The move comes as paper check scams surge across the financial system, inflicting growing harm on consumers, businesses, and especially community banks.

The agencies issued a call for public comment over the next 90 days and indicated plans to work more closely with state regulators and law enforcement.

“Today’s interagency announcement is a welcome first step,” said Federal Reserve Vice Chair for Supervision Michelle Bowman, while also calling out the slow pace of previous efforts. “This has been a well-known problem for several years, and regulators have done little to address this growing threat.”

Bowman stressed the need for a broader, more coordinated approach. She described rising levels of check fraud as a systemic issue that disproportionately affects smaller banks and leaves consumers exposed.

According to the proposal, federal agencies are seeking more robust data collection and expanded information-sharing mechanisms to track and prevent fraudulent activity more effectively.

In addition to these efforts, the agencies said they would evaluate how to better leverage tools and services already offered by the Federal Reserve Banks.

This could include technological updates to reduce fraud vulnerabilities across the payments landscape.

The announcement comes just one week after a bipartisan group of senators proposed legislation aimed at tackling the wider issue of payments fraud.

Their bill would create a formal task force to analyse the problem and propose solutions, including best practices for financial institutions and technology platforms.

The proposal signals growing political will to address a multibillion-dollar problem that has so far defied regulatory containment.

In a related development, President Donald Trump signed an executive order in March directing all federal agencies to stop issuing paper checks, citing fraud risks as a key concern. While largely symbolic, the move added pressure on regulators to act.

Check fraud is only one component of a broader payments fraud epidemic that has spread across digital channels as well.

Scams perpetrated through social media, e-commerce platforms, and mobile devices have become increasingly sophisticated, creating a complex threat environment for regulators and financial institutions alike.

Despite these modern threats, the resurgence of an analogue crime like check fraud has caught many by surprise. The new interagency push signals a recognition that even legacy systems remain dangerously vulnerable and that federal oversight must adapt.