Amicus brief reiterates opposition to EFTA expansion in fraudulent wire transfer lawsuit

America’s Credit Unions and the New York Credit Union Association, together with American Bankers Association, Bank Policy Institute, and the Clearing House Association, filed an amicus brief Monday in support of Citibank’s appeal in a lawsuit related to liability under the Electronic Fund Transfer Act (EFTA).

Citibank is appealing the District Court’s decision denying their motion to dismiss the case brought by the New York Attorney General against Citibank. This legal action supports Citibank’s position, arguing that the Uniform Commercial Code covers online wire transfers instead of the EFTA as asserted by the NYAG’s lawsuit.

In addition, the amicus brief filed with the Second Circuit reiterates an amicus brief filed by the group in the initial case, arguing that expanding the EFTA to include such transfers is contrary to decades of case law and regulatory guidance. Such a change would force banks and credit unions “to scramble to determine their legal obligations and to expend a tremendous amount of time and resources to reorganize their operations that had been built on a decades-old doctrinal foundation,” argued the groups.

A seismic shift in the regulatory treatment of wire transfers could force some credit unions to stop offering wire transfers altogether, which would have a negative impact on consumers.

America’s Credit Unions will continue to update credit unions as the litigation proceeds.