End of “The check is in the mail” as Trump seeks to phase out paper checks

• President Donald Trump issued an executive order requiring the federal government to stop issuing paper checks, starting Sept. 30.
• Local financial experts say the transition has pros and cons.
• How to get help transitioning from paper checks to electronic payments.

The federal government is phasing out paper checks in favor of electronic payments this fall, and financial experts both welcomed and cautioned the move.

The shift could have “serious unintended consequences” for people who rely on paper checks, said Jasmine Carson, executive director of empowerment and integration for the Wayne Metropolitan Community Action Agency, in a statement.

Individuals who receive paper checks in the mail for their tax returns, Supplemental Security Income and income will feel the biggest impact, she said. And people without bank accounts may struggle to transition, delaying payments, she said. One in four Detroiters is unbanked, owning neither a checking or savings account, according to a 2019 survey from the University of Michigan’s Detroit Metro Area Communities Study.

But Matt Hetherwick, chief program officer at the Detroit-based Accounting Aid Society, said the transition is a way to safeguard American taxpayers’ dollars. His agency has, for years, been encouraging direct deposits for refunds because paper checks are not as reliable or efficient, he said.

Here’s what local financial experts had to say about the potential merits and pitfalls of the transition:

What does the executive order say?

The change takes effect Sept. 30, according to a March executive order from President Donald Trump that directs the Secretary of the Treasury to “cease issuing paper checks for all Federal disbursements inclusive of intragovernmental payments, benefits payments, vendor payments, and tax refunds,” with exceptions, including people who don’t have access to banking services and national security or law enforcement activities. All executive departments and agencies must transition to direct deposit, prepaid card accounts and other digital payment methods. The president directed the change because, according to the order, paper checks and money orders impose “unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.”

Who will be impacted by the change?

The vast majority of people rely on direct deposits for their tax refunds and Social Security benefits. But there are individuals who still prefer paper checks and they may encounter some challenges, experts said.

The Wayne Metropolitan Community Action Agency partners with the city of Detroit and the Wayne County Treasurer’s Office to provide free financial counseling through the Financial Empowerment Center. The center’s clients could face unintended consequences, Carson warned. Wayne Metro will be doing outreach explaining the change and helping people transition to electronic options.