In August, IBAT President and CEO Christopher L. Williston sent a letter to the members of the House Financial Services and Senate Banking Committees urging action to address the pervasiveness and escalating cost of check fraud. Over the last two weeks, both lawmakers and regulators have responded to that call to action.
Recently, Representatives French Hill (R-AR), Bill Foster (D-IL) and thirty other members of Congress wrote to the federal banking agencies to “express significant concern over the alarming rise in physical mail theft-related check fraud” across the country. The bipartisan letter to the leaders of the FDIC, Federal Reserve, OCC, Financial Crimes Enforcement Network and National Credit Union Administration requests a bipartisan briefing and urges the agencies to work together to address this pressing issue and “better allow financial institutions to protect American consumers and businesses.”
In response to the Williston’s August letter, which was forwarded to the FDIC by Capitol Hill staff, outgoing FDIC Chairman Martin Gruenberg wrote to detail the agency’s efforts to address check fraud, including a dedicated email address to send concerns regarding banks’ failure to respond to efforts to resolve fraudulently altered items. Additionally, he noted that consumers can direct complaints to the FDIC Consumer Response Center.
Gruenberg’s response did not commit the FDIC to IBAT’s request that the federal banking agencies issue joint supervisory guidance to ensure that reimbursement requests citing breach or presentment warranties are timely and reasonably resolved. Instead, the letter claimed that the agency is “happy to discuss the possibility of issuing guidance” on the matter.
The House Financial Services Committee held a hearing prior to the Thanksgiving holiday, in which the federal banking regulators testified to current agency priorities and efforts. In that hearing, Gruenberg et al. committed to a “pencils down” approach and committed to not issuing new guidance or regulation before the Trump Administration begins January 20. As such, IBAT is doubtful there will be new check fraud guidance from the FDIC. IBAT wishes Chairman Gruenberg well in his overdue retirement on January 19 and is committed to working on the check fraud issue with a new administration.
