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Federal Reserve Banks cut 130 staff

The US Federal Reserve Banks is reducing its cheque processing capacity with the loss of 130 jobs, as consumers increasingly turn to electronic payments methods.

Cheque processing will be discontinued at locations in San Francisco, Kansas City and Helena, Montana. Other Reserve Banks centers will take on the work. Up to 280 staff will be cut representing about 8% of the Reserve Banks’ current check employees, although 150 positions will be created in the locations receiving the additional volume.

Gary Stern, chairman of the Reserve Banks’ financial services policy committee, said: These changes will help the Reserve Banks reduce our cheque service operating costs in line with the continuing shift in consumer and business preferences for electronic payments.

Since 2003, the Reserve Banks have reduced the locations where they process cheques from 45, to 18 locations nationwide after the latest changes take place. The most recent Federal Reserve study of the nation’s payment system revealed that about 37 billion cheques were paid in the United States in 2003 – down from 50 billion in 1995 – as electronic payments increased considerably.

The Fed said that as a direct result of previous restructuring efforts and other efficiency improvements implemented since 2003, the Reserve Banks earned revenues in 2005 that exceeded their targeted level of profitability for the first time in several years.