Treasury printed 40.9 million paper checks in fiscal year 2025, and a rule it floated this spring would shrink that number sharply. The Bureau of the Fiscal Service proposed on April 29, 2026 to stop agencies from issuing paper checks except in a short list of situations. It is a proposal only: comments closed June 15, 2026, and the rule is not in effect.
What the Fiscal Service proposed under 31 CFR Part 208
The proposed rule, titled “Management of Federal Agency Disbursements,” amends 31 CFR Part 208 and carries out Executive Order 14247, “Modernizing Payments To and From America’s Bank Account.” The order directs Treasury to cease issuing paper checks, and the proposal turns that direction into regulatory text by making electronic funds transfer the default for federal disbursements.
The numbers behind it are Treasury’s own. Electronic payments already make up 97% of the more than 1.3 billion payments Treasury disburses each year, which leaves the paper remainder at 40.9 million checks. Treasury also told the public that a check costs an average of $3.07 to issue, which it described as 20 times the cost of an Automated Clearing House payment.
The notice carries the names of three Treasury contacts: Lisa Andre, Senior Advisor; Frank J. Supik, Associate Chief Counsel; and Gary Grippo, Acting Fiscal Assistant Secretary.
Who has to think about timing
The people with the most at stake are those who still get a check from a federal agency, and Social Security payments are among the federal payments that can still arrive that way. For those households the question is practical rather than legal: if checks were phased out, how would the payment arrive, and what would they do if one came late?
Federal checks include Social Security payments, and the job for a reader who may be affected is knowing how a payment would arrive. The Social Security Check Protection Kit includes the 2026 payment calendar and a first-24-hours plan for a late or missing payment.
Plan for how a payment would arrive if paper federal checks end →
The five situations where paper checks would survive
Section 208.4(c) of the proposal lists the exceptions. There are five:
- Payments to a foreign country where electronic transfer is not supported by Treasury or is otherwise not feasible.
- Payments in a disaster area made within 120 days of the declaration.
- Contingency operations, as defined in 10 U.S.C. 101(a)(13).
- Situations involving national security or law enforcement, including threats to life and safety.
- Payments to individuals or entities on Indian land that lacks electronic payment infrastructure.
Everything outside those five would move to electronic delivery under the proposal. The disaster exception is time-limited by its own terms, since it reaches only payments made within 120 days.
Where the rule stands today
The Federal Register’s listing of Part 208 documents under this title shows the April 2026 proposal as the newest entry. The most recent final rule in that series dates to February 2024 and concerned narrowing existing waivers of the electronic payment requirement. No final rule implementing the 2026 proposal has been published, so no date exists on which paper checks would be cut off under it.
That matters because Treasury’s public messaging has not always matched the rulemaking record. Until a final rule appears in the Federal Register with an effective date, agencies’ current check practices are what govern, and the five exceptions are a draft.
What the exceptions leave out
None of the five exceptions is built around an individual’s preference. There is no carve-out in the list for a person without a bank account, an older adult who prefers paper, or a household that distrusts online banking. The proposal’s text, as summarised in the notice, ties each exception to a place or an emergency: a foreign country, a disaster declaration, a military contingency, a security threat, or tribal land without infrastructure.
Whether the final text keeps that list is unknown. Comments closed on June 15, 2026, and Treasury has not published what it received or any changes.
Moving a federal payment to direct deposit ahead of any deadline
The free route is already open. The Social Security Administration’s direct deposit sign-up page lets beneficiaries enroll through a personal my Social Security account, through Treasury’s Go Direct website, by calling 1-800-772-1213 or Treasury’s Electronic Payment Solution Center at 1-800-333-1795, or at a bank. Payments can go into an existing bank account or onto a Direct Express Debit Mastercard. SSA notes that paper checks are more likely to be lost or stolen than electronic payments, and that direct deposit removes the trip to cash a check.
Before switching, gather the routing and account numbers from a check or the bank, and note which agency issues each payment, since a Social Security change does not automatically move a pension or Veterans benefit payment.
The detail to watch is the Federal Register itself. A final rule would carry an effective date, and that date, not the April proposal, is what would start any clock.
For households sorting out payment timing, The Social Security Check Protection Kit is a paid product that contains the 2026 payment calendar and a first-24-hours plan for a late or missing payment, along with an overpayment response worksheet.
Click here to get The Social Security Check Protection Kit →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
