Fraud solutions should empower credit unions to protect members

Fraud is a top concern for credit unions, and America’s Credit Unions is working to raise greater awareness and make positive changes on the legislative and regulatory fronts. President/CEO Jim Nussle wrote to the House Financial Services Committee’s Oversight Subcommittee Wednesday with details and solutions to help Congress address fraud ahead of the Subcommittee’s hearing examining fraud today. 

These include: 

1. Adopting guidance to maximize the scope of permissible information sharing to target general financial fraud and any potential legislation should permit financial institutions to securely share payment fraud information within a legal framework;
2. Providing greater regulatory clarity over the parties responsible for payments fraud and liability, especially for electronic transfers. Any interpretative clarifications under Regulation E should be a formal notice of proposed rulemaking instead of issuing an interpretative rule;
3. Modernizing Regulation CC to better address check fraud that takes advantage of check processing vulnerabilities and limitations on hold times;
4. Issuing guidance to financial institutions that broadens the types of data that financial institutions may share and clarifies what circumstances are allowed in order to combat payments fraud;
5. Granting legal authority and liability protection when financial institutions are acting in good faith to decline services to protect members from fraudulent actors; and
6. Ensuring that publication of best practices to prevent or detect fraud does not constitute a mandate to adopt specific technical solutions. Future guidance should be appropriately tailored to the complexity and activities of individual financial institutions.

Comments are also due today to federal financial regulators request for information on ways agencies can combat payments fraud. America’s Credit Unions is submitting detailed comments as part of that effort as well.

Read the full letter