July 31, 2020

5 things to know this week

regNAFCU's widely-read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know news related to an issue in coin circulation, paycheck protection program (PPP) fraud, and a new Financial Crimes Enforcement Network (FinCEN) advisory.

Got coin?

Amid the coronavirus pandemic, consumers are using physical currency less frequently, which has resulted in fewer coins moving through the supply chain. The United States Mint is encouraging consumers to pay for things with exact change and return any spare change to circulation as part of its effort to offset the current disruption to supply channels. As part of the U.S. Coin Task Force, NAFCU has been working with the Federal Reserve, the U.S Mint and other industry stakeholders to address the problem and outline ways consumers can help. To help promote awareness and understanding of the coin circulation issue, use #GetCoinMoving on social media posts.

More small biz fraud revealed

A Florida man has been arrested and charged with fraudulently obtaining $3.9 million in PPP loans and using a portion of those funds to purchase a sports car for himself. At the time of the arrest, authorities seized a Lamborghini and $3.4 million from bank accounts. At this time, the defendant has been charged with making false statements to a financial institution, wire fraud, and engaging in transactions in unlawful proceeds. NAFCU will continue to monitor PPP fraud and the Small Business Administration's (SBA) efforts to detect and deter such fraud.

In addition, the SBA's Office of Inspector General issued a management alert this week on economic injury disaster loan (EIDL) fraud. The OIG’s office has received more than 5,000 instances of suspected fraud, and 3,800 of the reported instances came from only six financial institutions. It has also identified fraud rings via social media where individuals are recruited and then split the money. The report highlights examples of suspicious activity and suspected fraud such as:

  • accounts established using stolen IDs.
  • account holders unable to explain the origins of deposits or identify business names on loans.

It's business as usual for scammers

FinCEN issued an advisory Thursday alerting financial institutions to potential indicators of cybercrime and cyber-enabled crime the agency has observed during the coronavirus pandemic. Compiled using data from FinCEN's analysis of coronavirus-related information, the advisory describes malicious cyber activity and scams, associated financial red flag indicators, and information on reporting suspicious activity.

How can CUs support their small biz members beyond the pandemic?

Credit unions Thursday explored recent small business trends, as well as the impact of the coronavirus pandemic and how credit unions can better serve their business members during a NAFCU webinar, underwritten by Mastercard.

During the webinar, presented by Mastercard North America Small Business Lead Ginger Siegel, participants discussed a variety of issues including, the unique needs of small business members, the importance of segmentation, and how to unlock revenue potential for both the institution and its members with small businesses. View the complimentary webinar on-demand here.

The latest on payday lending

The Community Financial Services Association of America (CFSA) and CFPB filed their most recent joint status report in an ongoing federal court case challenging the CFPB's 2017 Payday Lending rule. Both parties agreed that there is no longer a basis for the action to remain stayed; however, the parties disagreed on how to move forward with CFSA arguing that the ratification of the payments provisions of the final 2017 Payday Lending Rule is legally insufficient. The parties also disagreed on whether the court should lift the stay of the compliance date for the payments provisions of the rule, which would have been August 19, 2019.

Earlier this month, the CFPB completed its rulemaking process related to small dollar lending, which included the rescission of mandatory underwriting requirements – including ability-to-repay (ATR) provisions – from the 2017 payday lending rule. Last month, the Supreme Court issued a ruling determining the CFPB’s single-director structure is unconstitutional in a lawsuit brought by Seila Law.