Inside ABA’s new Treasury Check Verification System API

ABA’s new online platform to provide members with free access to the Treasury Check Verification System is now live. On a special joint episode of the ABA Banking Journal Podcast and ABA Fraudcast — presented by Intrafi’s Banking with Interest podcast — ABA anti-fraud experts Paul Benda and Hannah Ibberson discuss the platform and how banks can put it to use. Among other topics, Benda and Ibberson discuss:

• The scale of physical U.S. Treasury checks and why they remained a potential vector for fraud
• How and why ABA developed the platform
• How ABA member bank employees — including frontline staff — can access the portal to verify a payee
• Ways this new platform fits into ABA’s overall anti-fraud initiatives

• Click here to download the episode if you can’t see the player above.
• Access the TCVS portal (ABA bank members only)

Episode Transcript

Evan Sparks (00:04):
From the American Bankers Association, this is
the ABA Banking Journal podcast.
Welcome back.
Today's episode is presented byIntrafi's Banking with Interest
Podcast and I am delighted to be hereto talk about a really exciting new.
Initiative in the fight against checkfraud that we have launched here at
the American Bankers Association.
And that is the API connection to thetreasury check verification System Portal.

(00:27):
And that's, and to talk about that withme, we're gonna do a little bit of a
ABA podcast fraud crossover with, yourfavorite fraud podcast are Paul Benda
ABA's, EVP for fraud, for risk managementpolicy, as well as our, my, our ABA
colleague Hannah Ierson, who works on allthings fraud related and and, and working
with, working alongside Paul here at ABA.

(00:48):
So Paul and Hannah, welcome to the show.

Paul Benda (00:51):
Thank you, Evan.
Thanks for having us.

Evan Sparks (00:54):
So so let's get started.
I'd love it.
Paul, if you could kind of giveus a sense, you know, we, we've
had this announcement that wentout about TCVS earlier today.
Listeners can find outmore at aba.com/tcvs.
Treasury check.
Verification systemsbeen up for a long time.
What's different about it now andhow is ABA helping bankers access it?

Paul Benda (01:14):
Sure.
So, yeah, I think most of our bankersthat deal with treasury checks know that
the TCVS system is out there in the open.
It's publicly accessible.
You can check treasury checks online andanyone can check them if you know the
amount and the treasury check number.
So unfortunately, the publicsystem did not check the payee
name, and so criminals had figuredthis out and were counterfeiting.

(01:36):
Treasury checks, so they could actuallywash 'em or they would reproduce them.
You can see 'em for sale on,on the dark web, on their on
telegram channels out there.
And they would sell thesecounterfeit checks that actually
passed TCVS verification.
So treasury knew theyhad an issue with it.
Treasury checks are challenge for ourbankers because the, you know, the one
day availability was, you know, requiringthem to give over $5,000 to people.

(01:57):
So they created the treasurycheck payee verification system
but they restricted access to it.
The only way you can access that system isthrough an API Direct to Treasury Systems.
You had to apply to Treasuryto get access to it.
They had to give you the keys toit, and it was hard for treasury to
roll this out to thousands of banks.
There were strong interest from banks.
ABA volunteered to be a serviceprovider for banks and provide this

(02:20):
as a free service for our members.
Treasury to their credit, jumped on it.
To give you an idea how quickthey responded to our application.
We sent this in, I think it wasat around four 30 on a Friday, and
we got the approval from Treasuryat 7:00 PM that Friday night.
Wow.
So they were, yeah, theywere, they were pretty quick.

Evan Sparks (02:35):
They were, they're working after hours over there.

Paul Benda (02:37):
Exactly.
Exactly.
And so our team, our team got on it.
Hannah was my program manager.
She's really, the brains behind the wholething wouldn't have happened without her.
And we built the, the, the accessto the system through aba.com
for all of our members for free.
I.

Evan Sparks (02:52):
Lemme turn to our, our to the brains behind the new a access portal.
Hannah, can you walk through how bankersaccess this and is there anything
they need to know to to get into thesystem and and make the most of, of
this new resource a b is providing.

Hannah Ibberson (03:05):
Yeah, so anyone from an ABA member bank can access
the treasury check verificationsystem access point from aba.com./
TCVs, we do check on three things.
The first is that they havea bank issued email domain.
So if they have.
An aba.com account associatedto a personal email address,
whether that be at Gmail or Yahoo,they will not receive access.

(03:28):
And then the second is we do havemulti-factor authentication in
the system, so a one-time codewill be sent to that bank issued
email address to verify the user.
Now, these first two steps are reallyjust to confirm that that person is
still an active employee at the bank.
Then the third is agreed terms andconditions, and they're pretty high level.
It's just in alignment withwhat Treasury has posted.

(03:50):
They are on aba.com as wellas in the system as well.

Evan Sparks (03:55):
Now, I'm curious, is this something that bankers can
use, kind of do batch processing ofthese, of this checking, or is it, is
this designed for kinda one-off whatindividual checks of a potential check?

Hannah Ibberson (04:06):
So at this time we only have single check verification.
So when they log in, they enterthat specific check, serial symbol
and amount, and then they check thebox, they click verify, and they get
that response for that single check.
At this time, we do nothave batch processing.
It's something we've been looking intobut that would be an upgrade in the

(04:26):
future if we deemed to go that route.

Evan Sparks (04:29):
Okay.
No.
One thing I am curious about withthe system, you know, Paul, can
you just speak a little bit tokind of the scale of the treasury
checks, checks that are out there?
You know, we, we had talked on thepodcast a few weeks ago with Steve
Kenneally about this new executive orderto that that's seeking to really have
treasury reduce the number of checksthat it both receives and sends out, you

(04:51):
know, but still to, you know, that's.
Still months away at the, at theearliest and possibly years, just
knowing how these modernizationefforts have gone in the past.
What is the, what's the scale ofthe treasury checks that are out
there and in terms of creating thispotential fraud vector for banks?

Paul Benda (05:08):
Yeah, so I mean this was, this is a question we had, you know, we
had embarked upon this process prior tothat announcement coming out, which we,
we fully applaud treasury for doing.
I know Steve.
Steve was, definitely thankingthem for putting that out.
But when we went on the check fraudpanel with the treasury Deputy secretary
and Deputy Assistant secretary, MattGarber you know, I got to talk to him

(05:29):
afterwards and said, Hey, for socialsecurity benefits, I. It's required
to be electronic payment already.
So Treasury already made thatconversion for social security benefits.
You have to sign up to get electronicpayments and he said, yeah, but
we've been a little too loose in theexemptions in the past and they were
putting out and still continue toput out 600,000 paper checks a month
just for social security benefits.

Evan Sparks (05:51):
Oh, okay.

Paul Benda (05:52):
So, so yes,.
While we are going to move off ofpaper checks and require them to
be electronic payments, we alreadyknow we have that process in place.
We already know we have vast amounts ofpaper checks still in the system now.
I think, you know, talking with withMatt, you know, treasury is interested in.
You know, who has those exceptions?
Do they really, you know,need those exceptions or just

(06:13):
a desire that they've got?
I think they're gonna be more strict,which ABA fully fully endorses, we think
people should, if you're getting regularpayments , they should be electronic.
It's much safer, it's muchfaster, it's much cheaper.
So hopefully that numberwill continue to come down.
But we know there's gonna be a,there's gonna be a tail for this.
So we know treasury checks are,are likely to be around at a
significant volume for a while.

Evan Sparks (06:31):
Sounds like it's an opportunity for the treasury to
talk with some of its payees aboutthe Bank On certified accounts.
If people are having a,having, still needing a paper
check to be sent out to 'em.

Paul Benda (06:39):
That's exactly right.
That's, and that, and they'reopen to those discussions.
They've been great partners for us.

Evan Sparks (06:43):
Yeah.
I wanna take a quick moment here tothank our sponsor for this month.
Banking With Interest Podcast,which features in-depth analysis
and insight into the policy changesreshaping the banking industry with
insightful interviews and previewsof pending policy challenges.
The podcast is an essentiallisten for anyone connected to
the financial services industry.
Banking With Interest is hostedby Rob Blackwell, an award-winning
former journalist with more than twodecades of experience as an expert on

(07:06):
financial services policy, he is nowthe chief Content Officer and head
of External Affairs with Intrafi.
That's the Intrafi Bankingwith Interest Podcast.
You can learn more at I-N-T-R-A-F-I.
That's intra fi.com.
And thanks again to theBanking with Interest podcast
for sponsoring this podcast.
So, coming back to the conversationon the treasury check verification

(07:27):
system access here, Hannah, are youenvisioning that banks, you know,
will, will check every treasury checkthat, that, that is presented to them?
Or is this something that, you know, whereyou, where a bank would say, oh, this is.
We have a, we, we are skeptical about thisparticular check and we'll check that.
Or is it somewhere in between?

Hannah Ibberson (07:45):
I think it's somewhere in between.
So the banks change howit's deployed, really.
It's up to them.
So some have it managed by a centralfraud team and others are deploying
this TCVS at the teller level.
So it is really up to the bankshow they want to do it, but it
is gonna be more if they believeit's a suspicious treasury check.

Evan Sparks (08:06):
So I'd love, and finally, Paul, I'd love it if you could kind of
maybe situate what this announcement,which is obviously something
important we're doing in the contextof the other things we're doing on
the, in the fraud space right now.
What's you know, what, where,what, what else is, does ABA have
cooking to help banks deal withthis the onslaught of check fraud?

Paul Benda (08:26):
Yeah, absolutely.
And so I, I do wanna, I do wannahighlight one thing Hannah said
before we move on to that is.
You know, we, we are excited thatthe, some of these banks are pivoting
to pushing their tellers to getaba.com accounts because we offer
such a wealth of frontline training.
So we think the more they can be on thatwebsite, the more they can be exposed
to that, the better off they can learnabout a lot of things we're talking about.

(08:47):
Evan, which is, we've got acheck fraud toolkit out there.
We've got a check fraudfrontline training course.
For folks to learn about, you know,how are the bad guys executing on
this check fraud type of thing.
We have our check fraud directory, or ourfraud contact directory that includes, you
know, over half of all banks in the UnitedStates and includes credit unions now.
And one of the things that we'rereally excited about is we're
gonna try and make the process of.

(09:09):
Holding funds that are sentfraudulently faster and easier.
So we know, you know, we, we actually justwent through this last week with a bank.
One of their customers was subjectto a business name and compromise
had sent money to obviously, youknow, the criminal who had spoofed.
You know, the, the email, the.
The bank reached out to the receivingbank but didn't have a good contact, so

(09:30):
we wanna try and build more contacts.
The bank didn't know that they shouldimmediately send a hold harmless letter.
We wanna try and make sure thatwe've got a universal hold harmless
they can use that will expeditethe holding of those funds.
And we wanna try and provide a legal andcompliant framework around this so that
people could agree to, Hey, if I get arequest from a bank that's gotta hold
harmless, that's done an investigationthat's, that's talked with their

(09:50):
customer as a customer at a station.
As agreed to these conditions, Iwill immediately hold the funds
related to that transaction whilewe do a further investigation.
And then we mark those on our fraudcontact directory with a blue check mark.
So you can imagine if you went throughthe blue, went through the fraud contact
directory, you're a blue check markbank, you see this, this transfer went

(10:11):
to another blue check mark Bank, youcould reach out and within minutes,
hopefully those funds are held.
'cause we know time is of the essence.
So this is an effortthat we have underway.
We're actually engaging outside legalcounsel to make sure that we are dotting
our i's and crossing our T's, that wecan build something that's compliant.
And we hope to get thisdeployed sometime this year.
Get this framework outthere sometime this year.
Because we think it'll have a reallymaterial impact on the flow of funds

(10:34):
to criminals and save our banksand their customers a lot of money.

Evan Sparks (10:37):
Great.
Great.
Thank you, Paul.
That's this is, this is really,this is a really cool product.
It's one of, you know it, it's, it's notoften that ABA deploys not just a resource
or a guide, but an actual, technologyproduct that serves all of our members.
And so that's so I know it's a bigdeal and and your team has done a
fantastic job putting this togetherand creating this, this new resource.

(10:59):
And, and, and just as a reminder,it is for ABA members only.
This is something that we, o wethat you do have to join ABA if
you want to tap into this, correct.

Paul Benda (11:08):
That is correct.
So there are vendors outthere that offer the service.
We know core service providers office, sobanks, banks can ask us at other places.
But the nice thing about ABAis, you know, we're already an
approved vendor for your bank.
You have an aba.com login.
It's very easy and cheap and it's free.
Well, it's, it's free.
So and, and if we do hear from banksthat want us to support batch processing,
that's certainly something we'd entertain.

(11:29):
So if there are banks out there that,that, that would desire that, you
know, let us know and we can, we cando cost benefit analysis and see if
we can get that deployed as well.
Great.

Evan Sparks (11:37):
Thank you.
Thank you, Hannah.
Thank you Paul, for being on the show.

Paul Benda (11:40):
Great.
Thanks for having us, Evan.

Evan Sparks (11:41):
And you can learn more about the, the treasury check verification
system, access at aba.com/tcvs.
For our listeners, you can find thisin previous episodes at aba.com/banking
journal podcast or on any of yourfavorite podcast apps or platforms.
Thanks so much for listening.
Go, go, go and subscribe to this podcast.
And Paul's ABA Fraudcast,you won't be disappointed.

(12:01):
Thanks so much for listening, andwe'll be back with you again very soon.