Carolina Logger
Second Quarter 2026
Strong Roots. Forward Growth.
Official publication for the Carolina Loggers Association
In This Issue
Association News
• Executive Chairman's Corner
• Director Discussion
Industry
• More Miles. More Risk. Less Margin.
• English Proficiency & CDL Compliance
Member Spotlight
• Honoring One of Our Own
Community
• Log A Load for Kids
Executive Chairman's Corner
Standing Together for Our Industry
By Stacy Reel, Chairman, Carolina Loggers Association
It is an honor to be named Chairman of the Carolina Loggers Association. I am grateful for the trust placed in me, and I will do my best to be a good steward of this organization and a strong voice for all of us who, at our core, are the farmers of the woodlands.
We work the land. We manage it. We harvest it responsibly so the next generation can do the same. That is something to be proud of.
Our recent Annual Meeting was a great reminder of what this association is all about. Strong attendance, meaningful conversations, and a shared commitment to advancing our industry. I want to thank our generous sponsors and vendors who made the event possible. Your support allows us to gather, learn, and grow together.
A special thank you to Toni McAllister for her honest and insightful message. She spoke directly to the real struggles our industry is facing and reminded us of something we cannot ignore. If we are not sitting at the table, we are on the menu. And the truth is, we have been on the menu for too long.
That is why your involvement matters.
As loggers, we are the boots on the ground. We see the challenges firsthand, and we understand what is at stake. The Carolina Loggers Association is strongest when its members are engaged, speaking up, and working together to protect our way of life.
Looking ahead, we know the road is not without its challenges. Many in our industry are still dealing with the effects of COVID-era SBA loans, along with ongoing restrictions around equipment sales and purchases. The time required for approvals continues to create real pressure on businesses that depend on timely decisions to operate and grow. These are issues that require attention, and we will continue to be part of those conversations.
At the same time, we are making progress where it counts. Our partnership with the North Carolina Highway Patrol has strengthened, leading to better communication, more consistent enforcement, and a greater focus on educating drivers on the road. That kind of relationship makes a difference not just for compliance but also for safety and respect across the industry.
I also want to remind each of you that your voice carries weight beyond meetings and legislation. Word of mouth matters. When you share your experience and the value of being part of the CLA, it helps grow this association. Positive stories, referrals, and conversations with your peers all contribute to a stronger, more unified group.
At the end of the day, this organization belongs to you.
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A Look Ahead: Strength, Growth, and a Unified Voice in 2026
By Jonzi Guill, Executive Director, Carolina Loggers Association
As we move into 2026, I find myself both grateful and energized by the direction of the Carolina Loggers Association and the people who make it what it is.
Over the past year, we have taken meaningful steps to modernize how we connect with our members and the industry. From the launch of our new website to increased member engagement that began in late 2025, the goal has been simple. Make the CLA more accessible, more responsive, and more valuable to you.
The feedback has been overwhelmingly positive. Our members and Board of Directors have embraced this new direction, and it shows. What you will continue to see is a refreshed image of your association, one that reflects who we are today and where we are headed. We are growing our content, expanding our reach across North Carolina, and strengthening partnerships with regional associations to better serve the entire forest products network.
Change also brings new leadership. During this year’s Annual Meeting, we recognized Chip Capps as he stepped down as Chairman, and we thank him for his steady leadership and service. We now look ahead with Stacy Reel taking up that role. Stacy brings energy, experience, and a clear vision for the future. And from where I stand, that future looks bright.
Our 2026 Annual Meeting was one of our most successful to date. I want to extend a special thank you to our keynote speaker, Toni McAllister, Executive Director of the Louisiana Loggers Association and PAC. Toni shared how their association has successfully mobilized members to stay engaged at both the state and federal levels, working closely with policymakers and leadership in Louisiana. Her message was clear. When loggers stay involved, our industry has a powerful voice.
One of the most meaningful moments each year continues to be the Log-A-Load Live and Silent Auction. Every dollar raised goes directly to Duke Children’s Hospital. This year, thanks to the incredible generosity of our members and sponsors, we raised over $75,000, the most ever. That speaks volumes about the heart of this association.
Behind the scenes, we remain focused on being your voice in North Carolina legislative matters. We are actively engaged, working to ensure that the needs and concerns of our members and the broader wood products industry are represented where it matters most.
None of this would be possible without the continued support of our sponsors. Their commitment allows us to do the work that supports you, our members, and strengthens this industry we all depend on.
We are building momentum, and we are doing it together.
If you have any questions or would like to get more involved, please email me anytime.
Thank you for your continued support.
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Log A Load for Kids: A Night That Defines Who We Are
Wow. What a night!
It’s hard to put into words the deep gratitude we feel for everyone who showed up, gave generously, and leaned into something far bigger than themselves. What happened wasn’t just an auction. It was a powerful reminder of the heart that beats at the center of this industry.
This year, the Carolina Loggers Association raised over $75,000 through our Live and Silent Auction benefiting Log-A-Load for Kids. Every single dollar, 100% of it, will go directly to Duke Children’s Hospital.
That number represents more than generosity. It reflects a community of people who understand the importance of giving back, who step up without hesitation, and who carry a genuine sense of responsibility for the communities we serve.
The Log A Load for Kids auction has become one of the defining moments of our Annual Meeting. Not just for the dollars raised, but for the spirit in the room, the energy, the camaraderie, and the shared purpose.
Of course, no recap of the night would be complete without recognizing the two individuals who help make it happen year after year: Blaine Reese and Stacy Reel.
Their presence, timing, and ability to connect with the crowd make the auction special. They create an experience that keeps the energy high, keeps the crowd engaged, and builds momentum, all of which drive the incredible success we see each year.
To every donor, bidder, sponsor, and everyone who raised a hand or made a contribution, thank you. Your generosity will create a real and lasting impact in the lives of children and families who need it most.
This is who we are. An industry built on hard work, grounded in tradition, and defined by people with incredibly generous hearts.
And on this night, that heart was on full display
2026 Chairman’s Award: Honoring Chip Capps
By Jonzi Guill, Executive Director, Carolina Loggers Association
There are people in this industry whose names mean more than any title. Chip Capps is one of them. It is a true honor to present him with this year’s Chairman’s Award, not just for what he has built, but for the steady, principled way he has led his business and this industry for decades.
Chip’s journey is one many of us know well. After graduating from North Carolina State University in 1981, he worked in the corporate world until his father called, asking for help with the family logging business his grandfather had started.
That call brought him home to the woods. Within a few years, he took ownership of Arcola Logging. As he often says, once you step into this work, sawdust gets in your blood. It becomes more than a job. It becomes a way of life rooted in independence and hard work.
Chip has built far more than a successful operation with multiple crews and a fleet of trucks. He has built trust. What sets him apart is his willingness to share the hard-earned lessons from experience, including the challenges, quick decisions, and adaptations required to survive in this demanding industry. He has freely shared that wisdom with others, making a real difference across North Carolina and the Southeast.
His commitment to the broader industry is undeniable. Chip has served on the Forestry Mutual Insurance Company Board, been active with the American Loggers Council, the North Carolina Forestry Association, and provided strong leadership as Chairman of the Carolina Loggers Association. In every role, he has made sure the voice of the working logger is heard.
Equally important is the legacy he is building at home. Working side by side with his son, Weldon, Chip is passing down more than a business. He is passing down values: doing things the right way, the power of relationships, and the discipline this life demands. That kind of transition is earned through years of quiet example, and Chip has set the standard every day.
Chip has never sugarcoated the realities of logging, the long hours, financial pressures, and constant balancing act. Yet he has also reminded us that the best lessons often come from those who walked the road before us.
This award is about character and quiet leadership. Chip, your impact shows in the operation you’ve built, the people you’ve mentored, and the example you’ve set.
On behalf of the Carolina Loggers Association, thank you for your lifelong service and dedication. This recognition is well deserved, and your legacy will continue to strengthen our industry for years to come.
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The Surge in Fuel Costs: Diesel’s Grip on Trucking and Log Haulers
For log haulers and the wood products industry in North Carolina, the message is clear: diesel price pain is temporary, building toward better reliability, fairer pricing, and energy stability. Enduring this squeeze paves the way for future gains.
Right now, the pump tells a different story. Diesel has jumped hard. The national average climbed to around $4.00 to $4.16 per gallon in early March 2026, with some reports showing spikes toward $4.60 in harder-hit areas. Wholesale prices surged over 30 percent in short bursts, and retail prices rose 14% to 22% in recent weeks. All of this was triggered by the Iran conflict choking the Strait of Hormuz, through which one-fifth of global oil flows.
A brutal Northeast winter also burned extra heating oil, practically the same fuel, making supplies tighter as the crisis began. The entire logging operation feels every cent. Not just the trucks hauling timber over remote roads, but also the equipment in the woods: skidders, feller bunchers, timber harvesters, and loaders, all burning diesel as they work long hours in demanding terrain. Fuel already takes a huge slice of total operating costs, often rivaling equipment maintenance, parts, and crew pay. Thin margins mean there is almost no cushion left when prices rocket like this.
Smaller owner-operators and family log-trucking outfits are squeezed hardest. The logging crews running those diesel-powered machines in the woods feel it too. Larger carriers can tweak fuel surcharges weekly and spread the hit somewhat. Independents and smaller operations usually cannot. One trucker described the speed of this rise as the worst he has seen in years. It forces thoughts of rate increases just to keep the wheels turning. In the Pacific Northwest, Southeast heartlands, and our pine-heavy North Carolina forests, every extra dollar per gallon compounds the challenge. Higher diesel prices quickly erode what little profit remains. Costs ripple into construction lumber, pulp, paper, and other wood products that keep our local economy moving, all things we know who work in the industry.
The broader trucking world shares the strain. Diesel makes up 20 to 25 percent of per-mile costs across fleets. Sudden wholesale leaps throw budgets into chaos. Smaller carriers are threatened with closure. Everyone is forced to rethink routes, idle trucks longer, or hunt for every possible efficiency. For full logging operations, the math is especially unforgiving. More fuel is burned per job. There are fewer easy ways to offset the pain at the pump.
Energy Secretary Chris Wright keeps stressing the flip side. He calls this elevated-price period temporary.
“It will not be long,”
He said in recent interviews, estimating weeks rather than months even in the worst case. The world sits on plenty of oil, especially in the Western Hemisphere.
The U.S. now exports far more than it imports. Once the Iran situation eases and shipments resume normal flow, relief should follow. Wright ties the current disruption to a single choke-point and a resolve to reduce reliance on it. Stabilizing that flow means fewer wild price swings in the future and steadier diesel costs for planning hauls, bidding jobs, running equipment shifts, and keeping crews paid. Consistent, fair access to petroleum becomes the norm. Breaking free from repeated volatility is the bonus that comes with it.
That long view does not erase today’s hurt, but it gives context. Log truck drivers, logging crews, and companies across the US, including here in North Carolina, are already adapting the way they always have. They watch pump prices hour by hour, tighten routes and equipment use, run the most efficient rigs and machines possible, and talk rates with mills when necessary. Smaller operations may face the toughest stretch. Some could teeter if the spike lasts for more than a few weeks. Still, officials’ outlook points to resolution soon, not years of high prices.
Endure the short, sharp pain now. The longer game is steadier fuel, fairer pricing, and freedom from the next geopolitical surprise at the pump. Keep an eye on the gauges. Adjust what you can across trucks and woods equipment and hold course. For small businesses that cannot easily raise prices in response to a sudden spike like this one, consider sharing this data openly with your customers, mills, buyers, and partners, who also have a real stake in keeping the supply chain stable and resilient. Better days for diesel and logging are closer than the current numbers suggest. No oncoming log truck, just a clearer road ahead, we trust.
FMCSA Issues Final Rule
Changing Framework for Non-Domiciled
Commercial Driver's Licenses;
Final Rule, like Interim Final Rule, Is Subject to Legal Challenges
Article provided by Setliff Law
Last September, the Federal Motor Carrier Safety Administration (FMCSA) issued an interim final rule that made significant changes to the regulations that govern non-domiciled Commercial Drivers Licenses (CDLs), which are CDLs issued to individuals whose primary residence is outside the U.S. but who are lawfully present in the U.S. under an employment authorization. Those changes included new requirements that tightened both the screening procedures used to issue non-domiciled CDLs and the eligibility criteria for non-domiciled CDLs issued to immigrants.
Although interim final rules usually do not take effect before the end of a public comment period, the FMCSA’s interim final rule on non-domiciled CDLs was designated to take effect immediately. Several parties including individual drivers, labor unions, and local governments, then filed petitions in the Court of Appeals for the D.C. Circuit that argued the interim final rule was illegal and did not comply with certain administrative requirements for rulemaking.
In November, the Court of Appeals issued its decision and stayed the enforcement of the interim final rule in its entirety. The Court of Appeals found that the parties challenging the interim final rule were likely to succeed in at least three of their challenges.
First, the Court of Appeals found that the petitioners would likely succeed on their claim that the FMCSA improperly issued the rule without prior “consultation with the States,” which is required by statute. The FMCSA argued that consultation was not required because the total cost to States of complying with the new regulations is not expected to be substantial and because consultation was not practicable. The Court of Appeals rejected those arguments, finding that the statutory requirement for consultation with the States does not contain any exceptions for insubstantial costs or impracticably.
Second, the Court of Appeals found that the petitioners would likely succeed on their claim that the FMCSA did not show good cause for issuing the rule without notice and comment. The Court of Appeals reasoned that the FMCSA attempted to show good cause based on public safety, but the Court of Appeals found that the FMCSA did not do so in part because the agency’s own data shows that non-domiciled CDL holders account for approximately 5 percent of all CDL holders but only about 0.2 percent of fatal crashes. The Court of Appeals also reasoned that given the FMCSA’s expectation that less-experienced drivers would replace the non-domiciled ones forced out of the market, the FMCSA did not appear to have shown that the rule would produce any net safety benefit.
Third, the Court of Appeals found that the petitioners would likely succeed on their claim that the FMCSA acted arbitrarily and capriciously in issuing the rule. The Court of Appeals also based this finding on FMCSA’s data showing that non-domiciled CDL holders account for disproportionately less fatal crashes than other CDL holders, as well as the FMCSA’s failure to adequately consider the reliance interests of immigrants who currently hold non-domiciled CDLs.
Because the Court of Appeals blocked the implementation of the interim final rule in its entirety, the FMCSA’s previous regulations for non-domiciled CDLs have been in effect instead.
The FMCSA has now issued its final rule changing the framework for non-domiciled CDLs. The rule was published in the Federal Register on February 13, 2026, and is scheduled to become effective on March 16, 2026. Some of the parties who successfully filed a petition challenging the interim final rule have also filed a petition challenging the final rule. It therefore remains to be seen if the final rule, which states that it reaffirms the requirements of the interim final rule with minor revisions for clarity, will go into effect on March 16, 2026 as announced. For guidance on how companies can prepare for the potential implementation of the new requirements, please see Setliff Law’s article on the interim final rule, Navigating NonDomiciled CDL Drivers: FMCSA Recognition and Employer Strategies for Litigation Protection.
The bottom line? Companies that employ non-domiciled CDL drivers are operating in a legal gray zone right now. The prior regulations remain in effect for the moment because the interim rule was stayed, but the FMCSA’s final rule is scheduled to take effect and is already being challenged again. That means the rules that govern non-domiciled CDLs could change quickly.
In practical terms, that means companies that employ non-domiciled CDL drivers should monitor the March 16 effective date closely and watch for another stay. Companies should also audit their non-domiciled drivers now so that they understand how the final rule, if it goes into effect, will affect their current employees. Most critically, companies should continue to plan for potential tightening of eligibility criteria, and the impact that could have on their operations.
The petitions challenging the interim final rule are styled as Jorge Lujan, et al. v. Federal Motor Carrier Safety Administration, et al., case number 25-1215, in the U.S. Court of Appeals for the D.C. Circuit. The petition challenging the final rule is styled as Jorge Lujan, et al. v. Federal Motor Carrier Safety Administration, et al., case number 26-1032, in the U.S. Court of Appeals for the D.C. Circuit.
If you have questions about this article, please contact Danielle Brim (dbrim@setlifflaw.com) at (804) 377-1264 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.
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I spend a lot of time talking with folks in and around the logging business here in North Carolina. What I keep hearing is not panic, not even frustration, but a steady kind of pressure building from every direction at once. It is not one issue. There are several, all stacking on top of each other.
Start with fuel. Diesel drives everything from the moment a tree is cut until it reaches the mill. Right now, it sits near four dollars and eighty-five cents a gallon, up nearly a dollar in the past week alone. When prices jump, the ripple hits hard, yet hauling rates and contracts frequently lag behind. Truckers and crews absorb the difference load by load.
Then comes distance. With fewer mills running in parts of the state, many crews now haul farther than before. What used to be a short run has turned into longer trips that burn more fuel and add extra hours and wear on equipment, often without extra pay.
Labor is another quiet strain. Fewer young people are entering logging, so veteran hands carry more of the load. Finding skilled equipment operators and reliable CDL drivers is tough. This work demands experience, judgment, and grit. Many seasoned loggers are mentoring the next generation on the job, passing along hard-earned knowledge.
Costs keep rising across the board. New equipment, repairs, downtime, and workers’ compensation insurance all squeeze tighter. There is little room for error. One spike in fuel, one surprise repair, or one delayed payment can sting the bottom line.
Yet the people in this industry keep showing up. They adapt, figure it out, and take real pride in the work, knowing it helps manage forests, supports local economies, and supplies materials we all use every day.
Still, if you listen closely, some have lost their spark. The drive and grit remain, but the inner fire feels dim.
That is where the industry must look inward. Communicate with one another. Check in. Share knowledge. Lend a hand when the pressure feels heavy. Sometimes it is not about fixing everything. It is about reminding a friend why they started in the first place.
Because a spark can be passed.
We are, after all, farmers of the woodlands. And just like any good farmer knows, if you want something to grow, you take care of the ground, and you take care of each other.
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What Loggers Need to Know: English Proficiency and CDL Compliance
Article provided by Setliff Law
There’s been a lot of conversation around English proficiency requirements for commercial drivers. Some of it has created confusion, so let’s focus on what’s current and what it means for you.
Federal law has long required that CDL drivers be able to read and speak English well enough to do the job safely. Under 49 CFR 391.11(b)(2), drivers must be able to read highway signs, communicate with officials, respond to questions, and complete basic reports.
What has changed is enforcement.
Following a 2025 Executive Order and FMCSA guidance, stricter enforcement of this requirement began on June 25, 2025. Drivers who cannot demonstrate sufficient English proficiency during a roadside inspection can now be placed out of service until the issue is resolved. This is actively happening across the country.
That brings several practical questions for our industry:
• Will employers need to evaluate drivers’ English proficiency beyond the initial licensing process?
• How can companies meet these safety expectations while also complying with federal employment laws that protect against discrimination based on national origin?
• What does this mean for day-to-day operations?
On the road, inspections now place greater emphasis on communication. Officers typically start in English and may ask drivers to read signs or answer basic questions. If a driver struggles significantly, it can result in an out-of-service order.
In accident situations or legal proceedings, drivers still have the right to remain silent or request an interpreter. How those rights interact with enforcement continues to be monitored, but the core safety requirement stands.
For now, the best approach is practical.
Make sure your drivers can clearly communicate during a roadside inspection—reading signs, understanding directions, and responding to basic questions without difficulty. Review hiring and onboarding processes with safety compliance in mind and provide support or training where needed. Balance this carefully with anti-discrimination obligations under federal law.
Here in North Carolina, our strong partnership with the North Carolina Highway Patrol continues to emphasize education, communication, and consistency. That collaboration benefits our drivers and the entire industry.
At the end of the day, this is about being prepared and staying safe, not creating alarm.
The Carolina Loggers Association will continue to monitor developments and share clear updates as more guidance or data emerges. If you have questions or run into issues in the field, reach out. We’re here to support you.
Q1 2026 Forisk Research Quarterly (FRQ) – Select Summary Findings
The Q1 2026 Forisk Research Quarterly (FRQ) includes industry analysis and market forecasts through 2035 for timber prices, logging costs, softwood lumber production, structural panels production, paper and paperboard production, forest supplies, and wood bioenergy markets.
Select summary findings from the Q1 2026 FRQ report include:
• Macro and Housing: The economy grew at a 4.4% annualized pace in Q3 2025, up from 3.8% in Q2 2025. Based on data through November, the unemployment rate increased to 4.5%. Yields on 10-year U.S. Treasuries fell to 4.1% in Q4 2025 from 4.3% during Q3 2025. Single family starts declined 1% through October 2025, while multifamily starts increased 18%.
• Lumber: North American softwood lumber production fell nearly 4% quarter-over-quarter and increased 3% year-over-year for the first three quarters of 2025. Through November 2025, year-over-year North American softwood lumber imports declined 9%. Sawmills in the U.S. South reduced capacity by 1.2 billion board feet (BBFT) in 2025.
• Structural Panels (OSB & Plywood): Q4 2025 U.S. OSB prices increased 5.8% and plywood prices decreased 0.6% from Q3. About $1.7 billion will be invested in North America’s structural panel sector through 2027, with an associated net capacity increase of 861 million square feet. Over 45% of U.S. structural panel imports through November 2025 came from Canada.
• Pulp & Paper: Paper and paperboard production fell 3.6% from 2024 to 2025. Packaging production fell 4.8% from Q3, down 3.5% year-over-year. Printing/writing production was down 7.5% for the quarter. OCC prices dropped 24.7% in Q4 and were down 37.4% year-over-year. Market pulp prices fell more than 5% year-over-year. U.S. pulp exports to China in Q4 were up 1.2% year-over-year.
• Wood Bioenergy: Bioenergy products that pass Forisk’s Wood Bioenergy Database screening plan to consume 99.3 million green tons per year of wood across the country. The U.S. South leads all regions in total projects and demand. Most bioenergy projects continue to be in the biomass-to-electricity, CHP, and pellet segments, though renewable hydrocarbon projects are increasing. Through November 2025, U.S. wood pellet exports increased 2% year-over-year while Canadian wood pellet exports increased 9%. North American wood pellet capacity is expected to grow 6.3% in 2026, to 22.7 million tonnes.
• Log & Chip Exports: Through November 2025, softwood log exports increased nearly 10% in the U.S. North and 42% in the South from November 2024. Western softwood log exports decreased 49%. Canadian softwood exports were down 8% year-over-year through November while U.S. softwood log exports were down 19%. U.S. softwood chip exports through November were up 1% over last year. 81% of log and chip exports from the United States are imported by Canada, Japan, and Vietnam, the top three U.S. forestry commodity trade partners.
• Timberland Investments: Public timber REITs returned 7.8% YTD through January 30th after returning -13.4% in 2025. All three timber REITs are trading above where they ended 2025. As a sector, timber REITs increased 5.2% for the quarter per the market cap weighted Forisk Timber REIT Index (FTR). 930 thousand acres of industrial timberland transactions closed in the U.S. for the last four quarters. TIMOs accounted for 60% of the acreage bought, while private sellers accounted for 44.0% of the acreage sold.
• Forest Operations: Logging employment declined 3% over the last 4 quarters, led by declines in the U.S. South and West. U.S. logging employment shrank by 20% over the last 10 years, matching losses incurred from 2005–2015. Trucking employment fell another 2% year-over-year, despite steady freight demand.
•Timber Markets, U.S. South: Stumpage prices
decreased for all pine products in Q4 2025, and increased for hardwood sawtimber and pulpwood, according to Timber Mart-South. The 2026 forecast for pine sawtimber implies a 0.4% decrease from 2025. Pine pulpwood stumpage prices are projected to increase the most through 2030 in Alabama and Mississippi.
• Log Prices, Pacific Northwest: Domestic Douglas-fir log prices fell 4% quarter-over-quarter in Oregon and Washington. Douglas-fir Japanese export (J-sort) prices dipped 4%, while export hemlock prices fell 1%. Logging and hauling costs are projected to increase 3% over the next 10 years for cable and ground-based logging.
• Hardwood Markets, U.S. North: Forisk’s Hardwood Price Index increased 6.3% in Q3 2025, up 2.1% year-over-year. Northern hardwood log exports declined for nearly all species over the past four years, with white oak the lone exception.
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Update:
Federal Transition to Electronic Payments: What You Need to Know
On March 25, 2025, President Trump signed Executive Order 14247, “Modernizing Payments To and From America’s Bank Account.” The order directed all federal agencies to transition to electronic payments for disbursements and, where permissible by law, for receipts.
Effective September 30, 2025, the U.S. Treasury ceased issuing paper checks for most federal disbursements, including tax refunds, Social Security and veterans’ benefits, vendor payments, and intragovernmental transfers. This change is now in effect.
Key provisions include:
- All executive departments and agencies must use electronic funds transfer (EFT) methods such as direct deposit, prepaid debit cards (e.g., Direct Express), debit/credit card payments, digital wallets, and real-time transfers.
- Payments made to the federal government, such as taxes, fines, fees, and loan repayments, must also be processed electronically where permitted by law.
- The Treasury Department conducted a public awareness campaign to assist individuals in setting up electronic payment options.
- The primary goals are improved security and efficiency. Paper checks are approximately 16 times more likely than EFTs to be lost, stolen, returned undeliverable, or altered. In FY 2024, the cost of maintaining paper check infrastructure exceeded $657 million.
What This Means Today (March 2026)
The vast majority of federal payments are now issued electronically. Individuals who previously received paper checks
(including roughly 390,000–400,000 Social Security and SSI recipients as of late 2025) were required to switch to direct deposit or an approved alternative. Exceptions remain for those without access to banking services and in certain emergency or hardship situations.
For taxpayers, the IRS now strongly encourages direct deposit for refunds on 2025 returns filed in 2026. Paper refund checks are generally no longer issued except in limited cases.
Action Steps for Clients
- Ensure your banking information is up to date with the IRS (via IRS.gov account or Form 8888), Social Security Administration, and any other federal agencies from which you receive payments.
- If you still receive or expect a paper check, contact the issuing agency immediately to enroll in electronic payments and avoid delays.
- Businesses and individuals making payments to the federal government should use approved electronic methods (e.g., EFTPS for taxes).
Important Note: This Executive Order does not authorize or establish a Central Bank Digital Currency (CBDC). It focuses solely on modernizing existing electronic payment methods. Clients who rely on federal payments or issue payments to the government should consult their tax or financial professional to confirm they are fully set up for electronic
transactions and to address any specific questions about exceptions or implementation.
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