Coordinated fraud response needed from regulators, legislators

Surging fraud costs—for consumers and financial institutions—necessitate a unified front from policymakers at every level. America’s Credit Unions Director of Innovation and Technology Andrew Morris outlines the steps needed to respond to rapidly developing technological challenges in CUInsight.

“Enhanced tools to fight fraud and protect members are desperately needed in the face of rapidly developing and evolving technological challenges that didn’t exist when credit unions first started serving members. America’s Credit Unions is working diligently to secure those resources with the support of our league partners, members of our Fraud Task Force, and credit unions of all sizes,” Morris wrote.

For regulators, that means improving early-warning capabilities, aiding consumer education, and enhancing voluntary information sharing between financial institutions, regulators, and law enforcement.

America’s Credit Unions responded to a request for information from federal financial regulators in September, giving specific recommendations and noting the NCUA and CFPB must be part of this process.

For Congress, it means advancing legislation, including the bipartisan Task Force for Recognizing and Averting Payment Scams (TRAPS) Act (introduced in both the House and Senate) and the Financial Reporting Threshold Modernization Act, to update Suspicious Activity Report/Currency Transaction Report reporting thresholds.

Congress and regulators can work together to update the PATRIOT Act safe harbor and resist expanding fraud liability under the Electronic Funds Transfer Act, Morris added.

Read the op-ed