Samantha: Hello, this is Samantha Shares.
This episode covers
Fighting Payments Fraud: A Deep Dive into Federal Banking Agencies' New Initiative
The following is an audio version summary of that document.
This podcast is educational and is not legal advice.
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And now summary of the request for comment on fighting payments fraud.
Fighting Payments Fraud: A Deep Dive into Federal Banking Agencies' New Initiative
today we're diving into a significant new initiative from three major
federal banking agencies to combat the growing threat of payments fraud.
On June 20th, 2025, the Office of the Comptroller of the Currency, the
Federal Reserve System, and the Federal Deposit Insurance Corporation jointly
issued a Request for Information seeking public input on how to better
address payments fraud across the U.S.
financial system.
The Growing Problem
Let's start with the scope of the problem.
According to the agencies, payments fraud is inflicting significant
harm on consumers, businesses, and financial institutions.
They define payments fraud as quote "the use of illegal means, including
intentional deception, misrepresentation, or manipulation, to make or receive
payments for personal gain."
The numbers are staggering.
Data from the Federal Trade Commission shows that losses reported for
non-card payments fraud increased 271 percent between 2020 and 2024.
Meanwhile, data from the Treasury's Financial Crimes Enforcement Network
shows that Suspicious Activity Reports filed related to check,
ACH, and wire fraud have increased 489 percent between 2014 and 2024.
Check fraud is particularly concerning.
The Treasury Department reports that check fraud in the United States has
risen 385 percent since the COVID-19 pandemic, and FinCEN reports that check
fraud accounted for approximately 30 percent of fraud-related Suspicious
Activity Reports filed in 2023.
Why This Matters
The agencies emphasize that payments fraud quote "has the potential to
erode public trust inâand undermine the safety, accessibility, and
efficiency ofâthe nation's payments system, upon which the U.S.
financial system depends."
What makes this particularly challenging is that, as the agencies note, quote "a
payments fraud scheme may involve multiple institutions and payment methods, each
of which may fall within the remit of different Federal and State agencies."
They acknowledge that quote "no agency or private-sector entity can
address payments fraud on its own."
Five Key Areas for Action
The Request for Information focuses on five potential areas for improvement:
1.
External Collaboration The agencies are asking: What actions could
increase collaboration among stakeholders to address payments fraud?
They're particularly interested in standard setting and identifying
organizations outside the payments and banking industry that might
provide additional insights.
2.
Consumer, Business, and Industry Education While financial education
resources exist, the agencies recognize there may be a need for more
specific payments fraud education.
They're asking what types of education are most effective and how
to make existing resources better.
3.
Regulation and Supervision The agencies want input on potential regulatory
changes and whether existing supervisory guidance is sufficient and clear.
They're particularly interested in how to help small community banks detect,
prevent, and mitigate payments fraud.
4.
Payments Fraud Data Collection and Information Sharing Currently, payments
fraud data is, quote "collected in an incomplete, non-standardized,
ad hoc, and fragmented way."
The agencies are exploring ways to improve data collection and sharing while
addressing privacy and legal concerns.
5.
Reserve Banks' Operator Tools and Services The Federal Reserve Banks
already provide risk management tools, but they believe quote "there may be
further opportunities for the Reserve Banks, as a payments system operator,
to provide additional tools and services designed to reduce payments fraud."
Specific Focus on Check Fraud
Given the particular problem with check fraud, the Federal Reserve
is specifically seeking input on potential amendments to Regulation
CC, which governs funds availability.
They're asking whether technological advancements have reduced the
time it takes to detect fraud such that funds availability
requirements should be shortened.
The Fed notes that checks contain sensitive information including quote
"the payor's name, account number, routing number, address, and signatureâthat
can be used by criminals to conduct other forms of payments fraud."
Looking for Solutions
The agencies are asking some practical questions that affect everyday banking:
â¢ Should Reserve Banks require fraud reporting for all payment rails?
â¢ Would confirmation of payee services help mitigate fraudulent payments?
â¢ How can financial institutions better resolve disputes about
allegedly fraudulent checks?
â¢ What technological solutions have been most effective in preventing fraud?
Industry Impact
The document reveals that the agencies have quote "received
complaints from supervised institutions regarding challenges in
resolving disputes about liability for allegedly fraudulent checks."
This suggests the problem is significant enough that banks are
actively seeking regulatory guidance.
Next Steps
Comments on this Request for Information are due by September 18, 2025.
The agencies are particularly interested in hearing from a variety of stakeholders
including consumers, businesses, financial institutions, and technology providers.
As one of the questions in the RFI asks: quote "What measures,
including technological solutions or services, have been most effective in
identifying, preventing, and mitigating payments fraud at your institution?"
Conclusion
This comprehensive Request for Information represents a significant
coordinated effort by federal banking regulators to tackle payments fraud.
With fraud losses in the billions and growing rapidly, the agencies are
clearly taking a proactive approach to protect consumers and maintain
confidence in the payments system.
The 26 detailed questions they've posed show they're serious about
getting input from all corners of the financial services industry.
Whether you're a bank, a fintech company, a consumer advocate, or just
someone who's been affected by payments fraud, your input could help shape the
future of fraud prevention in America.
That's all for today's deep dive into the federal response to payments fraud.
Thanks for listening
________________________________________ This podcast script is based on the Federal Register document
dated June 20, 2025, Volume 90, Number 117, pages 26293-26298.
This concludes our summary.
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This is Samantha Shares and we Thank you for listening.