ICBA Statement on Recent Report on Zelle Fraud

Washington, D.C. (Oct. 4, 2022) — Independent Community Bankers of America President and CEO Rebeca Romero Rainey issued the following statement on a recent report from Sen. Elizabeth Warren (D-Mass.) on Zelle.

“ICBA and the nation’s community banks are outraged by increasingly sophisticated fraud perpetrated by criminals against consumers, including those duped into authorizing payments to scammers using Zelle and other peer-to-peer payments services.

“With more than 99.9% of Zelle transactions sent without any report of fraud or scams, community banks appreciate the ability to offer the quick and efficient payments services that customers demand while encouraging Zelle and the largest banks to take measures that improve consumer awareness and protections against fraud.

“Consumer protection is ingrained in the community bank business model, with community banks:

• Following strict federal electronic funds transfer regulations, which require banks to investigate and resolve withdrawals and transfers that customers do not authorize.

• Offering educational resources to help customers understand and avoid potential scams.

• Serving as relationship bankers who are there for their customers to discuss potential scams, mitigate any issues, and determine next steps.

“Regulatory restrictions are not the answer to P2P fraud because they will never keep up with the pace of evolving fraud and will serve to disrupt banking services, forcing consumers to look to nonbank money transmission services that operate outside of the banking sector. Further, unlimited liability for P2P fraud under Regulation E would have a disproportionate impact on community banks.

“Instead, policymakers should focus more on the fraudsters and work with P2P technology vendors to maximize consumer awareness of fraud schemes and implement safeguards, such as multifactor authentication, to reduce consumer approvals of fraudulent transactions without delaying consumer access to their funds.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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