WASHINGTON—American seniors are often the target of fraudulent schemes and scam calls, resulting in $3.4 billion in stolen funds in 2023 alone, America’s Credit Unions noted.
Senate bills S. 4943 and S. 1838 raise significant credit union concerns in long-term efforts to address this issue, said and America’s Credit Unions, which outlined those concerns in advance of the Senate Special Committee on Aging’s hearing on scams.
In the letter, sent by ACU president/CEO Jim Nussle, the trade association noted credit unions’ commitment to stopping fraud while urging committee members to oppose S. 4943 and S. 1838.
S. 4943 seeks to expand the liability for financial institutions for payments-related fraud.
Level Playing Field
“Credit unions support efforts to stop fraudulent schemes and invest in robust compliance programs to limit this activity, but an expansion of credit unions’ liability for the misdeeds of fraudulent actors would have the unintended effect of limiting consumer choice and access to services,” Nussle wrote. “Rather than approaches such as S. 4943, we believe that legislative efforts are better directed at steps to prevent fraud before it occurs, educate consumers about fraud and risks associated with unregulated technologies, and create a level playing field for currently underregulated fintech companies and insured depository institutions.”
Nussle also focused on concerns with S. 1838, the interchange “Big Box Bailout” bill requiring financial institutions to allow credit card transactions to be routed via alternate networks and enable all transaction types, creating security and fraud concerns.
“Proponents of this bill say that it targets large banks and will not hurt others. They are wrong. The reality is that it will hurt community financial institutions and consumers, and we strongly oppose this legislation,” he wrote. “Additionally, the bill contains an explicit requirement that card issuers enable all types of transactions and security protocols, even if a credit union finds that these methods are unnecessary, unaffordable, or unsecure.”
The letter highlighted credit unions’ continued opposition to this bill, as it would “directly affect credit union investment in fraud management systems and processes that are dedicated to reducing fraud risk” with its reduction in interchange fees for financial institutions.