Last week, IBAT upped the ante in the fight back against the big banks for their failure to police check fraud. In a letter sent to the members of the Senate Banking and House Financial Services Committees, IBAT President and CEO Christopher Williston called the trend of check fraud, “a failure of the nation’s largest banks and the regulators that supervise those banks.”
“Check fraud harms everyday consumers and damages the reputation of community banks who truly know their customers,” Williston said. “Check fraud is a serious financial crime that aides and abets human trafficking, drug trafficking and terrorist financing.”
“IBAT members are perplexed that, on one hand, the regulators are strictly enforcing compliance with KYC/BSA/AML/CDD/CIP/OFAC regulations and SAR reports on community banks, but they are not insisting on the same level of compliance for the largest financial institutions,” Williston added.
Over the last several months, IBAT has engaged in ongoing efforts to raise awareness on the proliferation of check fraud and its impact on community banks. The letter highlighted the IBAT Fraudulent Item Returns Survey Results, which found that more than 90 percent of member banks who responded to the survey experience problems in being reimbursed for fraudulent items from the bank of first deposit.
Informal communications from key committee staff and Texas Congressional offices who received the letter from IBAT convey a sense that the message and data are timely and welcome. IBAT urges its members to share the letter with media, business customers and elected officials to raise awareness of how check fraud is plaguing our community banks and the state’s businesses.
