What is the Regional Check Processing Center?

Regional Check Processing Center - RCPC is a local Federal Reserve facility where checks that are drawn on depository institutions are processed overnight. A regional check processing center conducts check-clearing operations including paper and electronic, and interbank check clearing. A depository institution is a financial institution such as a savings bank, credit union, commercial bank or savings and loans where the public makes deposits. Due to the increasing reliance on electronic check processing, the Federal Reserve Bank mainly processes electronic forms of payment through credit cards, debit cards and online account transfers versus paper checks.

Understanding the Regional Check Processing Center (RCPC)

The Federal Reserve continuously updates its check processing systems and restructures its schedules in order to meet the demand of check processing and make it more efficient in accordance with technological advancements. According to the Fed, the number of checks written in the United States has been declining since the mid-1990s as electronic processing of checks is increasing.

How the RCPC Works

The Federal Reserve Banks provide check collection services to depository institutions. "When a depository institution receives deposits of checks drawn on other institutions, it may send the checks for collection to those institutions directly, deliver them to the institutions through a local clearinghouse exchange, or use the check-collection services of a correspondent institution or a Federal Reserve Bank. For checks collected through the Federal Reserve Banks, the accounts of the collecting institutions are credited for the value of the checks deposited for collection and the accounts of the paying banks are debited for the value of checks presented for payment. Most checks are collected and settled within one business day

The number of checks written nationally has been declining since the mid-1990s as the use of electronic payment instruments has grown. In addition, the Check Clearing for the 21st Century Act (Check 21) removed barriers to the electronic collection of checks and electronic check collection has now become the primary method for collecting checks. Indeed, almost all checks processed by the Reserve Banks today are deposited and presented using the Reserve Banks' electronic check collection services. These changes have enabled the Reserve Banks to reduce their national check-processing infrastructure so that, since early 2010, they have been processing paper checks at one location nationwide, down from 45 in 2003," the Fed noted.

Nearly all the checks the Federal Reserve Banks process for collection are now received as electronic check images. From 2003-12, checks decreased by half, from 36 billion to 18 billion. Since then, that number has fallen to well under 10 billion.