Sessions, Colleagues Request GAO Investigation into Plano-Based Company, Check 21 Legislation Implementation

Statement

Sessions, Colleagues Request GAO Investigation into Plano-Based Company, Check 21 Legislation Implementation

U.S. Congressman Pete Sessions (R-Dallas) today joined Texas colleagues Congressman Jeb Hensarling and Congressman Kenny Marchant in sending a letter to the Government Accountability Office (GAO), requesting an investigation into Plano-based DataTreasury, its pending check processing patent litigation against nearly 60 U.S. financial institutions, and related implementation of non-paper check processing as mandated by congressional legislation.

"This GAO investigation request represents an effort to obtain nonpartisan, independent answers regarding the activities of DataTreasury and the impact of its litigation on U.S. financial institutions' abilities to operate electronic check processing," said Sessions.

Following the terrorists attacks of September 11, 2001, nearly $50 billion in check transactions were stalled due to the inability to physically transport checks for processing. In response, the Federal Reserve released billions of dollars in liquidity into the financial system to cover this disruption. This incident highlighted the need for electronic check clearing, which the Federal Reserve has studied and U.S. financial institutions have been developing and utilizing over the last two decades.

In 2003, Congress passed and the President signed into law the Check Clearing for the 21st Century Act (Check 21) - legislation removing legal barriers for electronic check processing and allowing for its market-based implementation to facilitate check system efficiency and help preserve economic security in the event of a natural disaster or attack against our nation.

In the U.S. Senate, an amendment to patent reform legislation was offered and recently withdrawn by Senator Jeff Sessions (R-AL) that would have in effect provided immunity to financial institutions from patent-related litigation involving electronic check processing. As the House and Senate consider patent reform legislation in the future, DataTreasury's patent litigation and the related slow implementation of Check 21's mandate for non-paper check clearing are all but certain to be topics for review and consideration.

"Sooner or later, Members of Congress may be required to vote on legislation or amendments affecting this situation, and I believe that Congress should have certainty of the facts and the ability to make an informed decision about the correct course of action," Sessions concluded.

Congressmen Pete Sessions, Jeb Hensarling, and Kenny Marchant are members of the House Financial Services Committee. Sessions remains on leave due to his responsibilities as a member of the House Rules Committee.

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