Examining payments fraud, stablecoin proposals

Examining the latest proposals to equip credit unions to fight fraud, America’s Credit Unions’ Fraud Task Force met Thursday. The discussion included current and upcoming legislative and regulatory proposals.

Task force members discussed Rep. Young Kim’s (R-CA) STOP Payments Fraud Act, which would provide credit unions with stronger, more flexible tools to combat payment fraud while better aligning regulatory standards with current needs.

This includes:

• Lowering the evidentiary threshold for holding suspicious funds from “reasonable cause” (fact-based) to “reasonable suspicion” of fraud;
• Defining “reasonable suspicion” to include the “existence of indicators that would lead a reasonable person to suspect that the check involves fraud;” and
• Allowing the CFPB and the Federal Reserve to establish exceptions permitting financial institutions to hold funds for up to 60 days in “greater fraud risk” situations.

It passed the House Financial Services Committee earlier this month with a unanimous 51-0 vote.

The group also discussed the June joint proposal to require permitted payment stablecoin issuers to maintain an effective customer identification program (CIP). The proposal also includes adding a new definition of “account,” containing unique provisions that reflect the kinds of activities in which PPSIs can engage,

Comments on the proposal are due to the agencies by Aug. 21.