WASHINGTON—Legislative proposals to expand financial institution liability under the Electronic Fund Transfer Act (EFTA) are deeply concerning to America’s Credit Unions and its members, ACU wrote to the Senate Homeland Security Permanent Subcommittee on Investigations prior to the subcommittee’s hearing this week on fraud and the Zelle.
Credit unions, community banks, and minority depository institutions comprise more than 95% of Zelle’s participating financial institutions, and it “levels the playing field” for credit unions that lack the resources of smaller institutions, ACU stated.
“EFTA was designed to strike a balance between the financial institution’s role in preventing unauthorized transactions and the individual’s responsibility to exercise sound financial judgment over authorized transactions,” ACU President/CEO Jim Nussle wrote. “To effectively combat fraud while providing members with convenient and affordable payment options, credit unions must have confidence that longstanding limits on financial institution liability will not suddenly change when conduct outside the industry’s control evokes political concern.”
‘Going Beyond What’s Required’
Nussle added that Zelle participants currently go beyond what is required by the text of EFTA and Regulation E by providing special reimbursements, and Zelle adopted a new policy requiring participant financial institutions to reimburse claims arising from transactions involving imposters claiming to be from a government agency, bank, or existing service provider in 2023.
“America’s Credit Unions appreciates efforts to promote consumer and industry resilience to fraud, but asks that the Subcommittee explore solutions that adhere to legally sound interpretations of EFTA,” he wrote.
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