The recent increase in fraudulent U.S. Treasury checks has become a nationwide issue. More specifically, Catalyst has witnessed several instances of this fraud type involving MICR line alteration (i.e. removing or changing the routing number field and payee information).

We want to make you aware of this growing concern and the potential loss credit unions can incur from depositing fraudulent Treasury checks.

Unlike financial institutions, the U.S. Treasury is not required to meet the 24-hour expeditious return deadline. Therefore, these items are being returned and/or processed as adjustments (NOI) months after presentment, and normal check holds will not secure the associated funds. It’s important to consider this information when accepting deposits.

Here are a few ways you can help protect your credit union:

• Take extra care in accepting, and verifying the authenticity, of all Treasury checks.
• Verify correct routing transit number (all Treasury checks use routing number ending in 518 preceded by zeroes).
• Ensure “U.S. Treasury” watermark visibility on front & back.
• Examine the “pay to” line, confirming correct font and placement.
• Pay attention to member behavior. If a member doesn't regularly deposit Treasury checks or high-dollar checks, exercise caution when authenticating or consider refusing the deposit.
• Find additional Treasury check validation training for you and your teller staff.

For assistance, or more information. please contact the Catalyst Item Processing team.