This week, Independent Community Bankers of America (ICBA) had previously testified Congress on legal and regulatory advice to help community banks combat fraud and fraud.
Testifying before the Financial Institutions Subcommittee of the House Financial Services Committee, Gay G. DempseyThe CEO of Bank of Lincoln County in Fayetteville, Tenn., said the fraud problem is urgent and must be combated through coordination at all levels between financial institutions, law enforcement and government. To illustrate the need for an effective response, Dempsey shared stories of individual and small business customers who have fallen victim to different types of scams, including romance scams and other imposter scams originating from social media, and stolen and altered checks in the mail.
“Anatolian banks are in a unique position to prevent, detect and reduce fraud and fraud and take this role very seriously.” said Dempsey, a member of ICBA’s Fraud and Fraud Task Force. “As relationship bankers, community banks get to know their customers in real and meaningful ways. These relationships promote access to services, prevent fraud on the front lines, and provide customers with a personal resource when they become victims of fraud or scams.”
Noting ICBA’s support for recent administration initiatives to combat fraud, Dempsey advocated for additional regulatory changes such as:
- Allowing longer hold periods and clearer guidance under Regulation CC for check deposits to help identify suspected payment fraud;
- Introducing an appropriately tailored interbank dispute resolution process that will enable community banks to more efficiently pursue check fraud allegations; And
- Ensuring that Federal Reserve check services that help catch fraud are not stopped.
During Dempsey’s testimony, ICBA also weighed in on several bills before the committee, including the ICBA-backed Stop Fraud Act to replace the Expedited Funds Availability Act in the case of fraudulent checks or wire transfers, and the Bank Fraud Technology Improvement Act, which would require federal banking regulators to study the use of advanced technologies in fraud detection and prevention.
ICBA said it has led and strongly supports numerous efforts to combat check fraud:
- Partnering with the U.S. Postal Inspection Service to provide educational materials to community banks to help consumers protect their financial assets;
- Supporting the Trump administration’s efforts to address the Treasury Department’s use of paper checks;
- Leading the Fraud and Fraud Task Force, comprised of community bankers and state association partners focused on information sharing and industry collaboration;
- Offering resources on the ICBA website, including guides and online courses for community bankers on check fraud; And
- Supporting the growth of instant payment options such as the FedNow Service, which enable efficient payments and instant disbursements of funds while reducing risks to the financial system.
