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New insight post breaks down Reg E and P2P fraud
In the latest insight post on NAFCU’s Compliance, Risk, and BSA Network, Senior Counsel for Research and Policy Andrew Morris shares the most recent concerns surrounding P2P fraud and how the financial industry is combatting these situations to better protect consumers.
In the post, Morris shared observations about the security controls and anti-fraud measures financial institutions have adopted in making the decision to offer highly-sought after P2P payment options to their members. Although these measures are set in place to promote responsible P2P use, increasing digitization of commerce and sophisticated social engineering scams makes managing the risk of fraud a complex endeavor.
Morris also included perspectives on the fraud vectors in the P2P space with potential solutions to better educate consumers and find ways to get law enforcement better involved in identifying organized crime groups targeting consumers.
NAFCU has frequently engaged the CFPB and other agencies on this topic, educating regulators about the value of P2P services for members and the harms of extending additional Regulation E liability to credit unions.
The association, on numerous occasions, most recently to the House Committee on Financial Services, has expressed that regulatory and legislative efforts should focus more on stopping fraud before it happens rather than increasing liability to credit unions - which would negatively impact the way they operate and serve their members with affordable and convenient payment options.
NAFCU President and CEO Dan Berger wrote to CFPB Director Chopra earlier this year when the agency announced the possibility of future guidance on Reg E, writing that further expansion of credit union liability under any new guidance would “magnify this risk beyond reasonable limits and have far reaching consequences.”
NAFCU member credit unions that are part of the NAFCU Network can provide feedback and insights on this topic through the post.
NAFCU’s Compliance, Risk, and BSA Network is a complimentary, member-only online community exclusively for credit union compliance professionals. Learn more about the NAFCU Networks.