Banks Catch a Break on Payment Fraud
Today’s Senate Banking Committee hearing on scams and fraud in the banking system focused on the rise of P2P payment app scams, the growing popularity of traditional methods of fraud executed via wire transfer and check fraud, and emerging crypto and AI risks. Democrats focused on legislative remedies; the handful of Republicans who attended the hearing pushed for consumer education. Chairman Brown (D-OH) generally lambasted banks as too lax when it comes both to fraud and consumer redress but he nonetheless praised the American Bankers Association for its new anti-fraud system. Indeed, attacks on Zelle – a feature of prior hearings (see Client Report REFORM213) – were muted. The chair and other Democrats also endorsed the CFPB’s pending proposal on tech payment companies (see FSM Report PAYMENT27), recently attacked in a comment letter from House Republicans.