[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
FIGHTING FRAUD ON THE FRONT LINES:
CHALLENGES AND OPPORTUNITIES
FOR FINANCIAL INSTITUTIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
MARCH 5, 2026
__________
Serial No. 119-60
Printed for the use of the Committee on Financial Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
63-967 PDF WASHINGTON : 2026
=======================================================================
HOUSE COMMITTEE ON FINANCIAL SERVICES
FRENCH HILL, Arkansas, Chairman
BILL HUIZENGA, Michigan, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
ANN WAGNER, Missouri NYDIA M. VELAZQUEZ, New York
ANDY BARR, Kentucky BRAD SHERMAN, California
ROGER WILLIAMS, Texas GREGORY W. MEEKS, New York
TOM EMMER, Minnesota DAVID SCOTT, Georgia
BARRY LOUDERMILK, Georgia STEPHEN F. LYNCH, Massachusetts
WARREN DAVIDSON, Ohio AL GREEN, Texas
JOHN W. ROSE, Tennessee EMANUEL CLEAVER, Missouri
BRYAN STEIL, Wisconsin JAMES A. HIMES, Connecticut
WILLIAM R. TIMMONS, IV, South BILL FOSTER, Illinois
Carolina JOYCE BEATTY, Ohio
MARLIN STUTZMAN, Indiana JUAN VARGAS, California
RALPH NORMAN, South Carolina JOSH GOTTHEIMER, New Jersey
DANIEL MEUSER, Pennsylvania VICENTE GONZALEZ, Texas
YOUNG KIM, California SEAN CASTEN, Illinois
BYRON DONALDS, Florida AYANNA PRESSLEY, Massachusetts
ANDREW R. GARBARINO, New York RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin RITCHIE TORRES, New York
MIKE FLOOD, Nebraska NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York BRITTANY PETTERSEN, Colorado
MONICA DE LA CRUZ, Texas CLEO FIELDS, Louisiana
ANDREW OGLES, Tennessee JANELLE BYNUM, Oregon
ZACHARY NUNN, Iowa SAM LICCARDO, California
LISA McCLAIN, Michigan
MARIA SALAZAR, Florida
TROY DOWNING, Montana
MIKE HARIDOPOLOS, Florida
TIM MOORE, North Carolina
Ben Johnson, Staff Director
------
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS
ANDY BARR, Kentucky, Chairman
BARRY LOUDERMILK, Georgia, BILL FOSTER, Illinois, Ranking
Vice Chairman Member
BILL HUIZENGA, Michigan NYDIA M. VELAZQUEZ, New York
ROGER WILLIAMS, Texas GREGORY W. MEEKS, New York
JOHN W. ROSE, Tennessee DAVID SCOTT, Georgia
WILLIAM R. TIMMONS IV, South BRAD SHERMAN, California
Carolina AL GREEN, Texas
RALPH NORMAN, South Carolina JUAN VARGAS, California
DANIEL MEUSER, Pennsylvania SEAN CASTEN, Illinois
YOUNG KIM, California STEPHEN F. LYNCH, Massachusetts
BYRON DONALDS, Florida JOYCE BEATTY, Ohio
SCOTT FITZGERALD, Wisconsin CLEO FIELDS, Louisiana
MIKE FLOOD, Nebraska
MONICA DE LA CRUZ, Texas
TIM MOORE, North Carolina
C O N T E N T S
----------
Thursday, March 5, 2026
OPENING STATEMENTS
Page
Hon. Andy Barr, Chairman of the Subcommittee on Financial
Institutions, a U.S. Representative from Kentucky.............. 1
Hon. Bill Foster, Ranking Member of the Subcommittee on Financial
Institutions, a U.S. Representative from Illinois.............. 3
STATEMENTS
Hon. French Hill, Chairman of the Committee on Financial
Services, a U.S. Representative from Arkansas.................. 4
WITNESSES
Mrs. Gay Dempsey, Chief Executive Officer, Bank of Lincoln
County, on behalf of The Independent Community Bankers Of
America (ICBA)................................................. 5
Prepared Statement........................................... 8
Mr. Patrick McDade, Senior Vice President for Fraud and
Technology Risk Management, Everbank, on behalf of The Consumer
Bankers Association (CBA)...................................... 22
Prepared Statement........................................... 24
Ms. Kate McKune, General Counsel, Park Community Credit Union, on
behalf of America's Credit Unions (ACU)........................ 42
Prepared Statement........................................... 44
Mr. Joseph J. Schuster, Partner, Ballard Spahr LLP............... 61
Prepared Statement........................................... 63
Mr. Adam Rust, Director of Financial Services, Consumer
Federation of America (CFA).................................... 91
Prepared Statement........................................... 93
APPENDIX
MATERIALS SUBMITTED FOR THE RECORD
Hon. Barry Loudermilk:
American Securities Association.............................. 146
Hon. Young Kim:
American Financial Services Association...................... 150
SIFMA........................................................ 152
Hon. Al Green:
``Melania Trump's meme coin architects accused of pump-and-
dump fraud in lawsuit''.................................... 155
``Trump meme coin down 96% as Bitcoin and meme coins slide''. 157
``Firm Tied to Kristi Noem Secretly Got Money From $220
Million DHS Ad Contracts''................................. 160
Hon. Hon. Andy Barr:
Bank Policy Institute (BPI).................................. 169
The Responsible Data Alliance (RDA).......................... 172
American Land Title Association (ALTA)....................... 175
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Representative
Rose
Mrs. Gay Dempsey............................................. 178
Mr. Patrick McDade........................................... 182
Ms. Kate McKune.............................................. 184
Mr. Joseph J. Schuster....................................... 185
Written responses to questions for the record from Representative
Fitzgerald
Mrs. Gay Dempsey............................................. 189
Ms. Kate McKune.............................................. 190
Mr. Joseph J. Schuster....................................... 192
LEGISLATION
H.R.----, the Transaction Risk Analytics and Collaborative
Exchange (TRACE) Act of 2026................................... 195
H.R.----, the Bank Fraud Technology Advancement Act of 2026...... 201
H.R.----, the Scrutinizing Transactions for Overt Payment Fraud
(STOP Fraud) Act............................................... 210
FIGHTING FRAUD ON THE FRONT LINES:
CHALLENGES AND OPPORTUNITIES
FOR FINANCIAL INSTITUTIONS
----------
Thursday, March 5, 2026
U.S. House of Representatives,
Subcommittee on Financial Institutions,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
room 2128, Rayburn House Office Building, Hon. Andy Barr
[chairman of the subcommittee] presiding.
Present: Representatives Barr, Hill, Huizenga, Williams,
Loudermilk, Rose, Timmons, Meuser, Kim, Fitzgerald, Flood, De
La Cruz, Moore, Hill, Foster, Waters, Scott, Sherman, Green,
Vargas, Casten, Lynch, and Beatty.
Chairman Barr. The Subcommittee on Financial Institutions
will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
Today's hearing is titled ``Fighting Fraud on the Front
Lines: Challenges and Opportunities For Financial
Institutions.''
Without objection, all members will have five legislative
days within which to submit extraneous materials to the chair
for inclusion in the record.
I now recognize myself for 4 minutes for an opening
statement.
OPENING STATEMENT OF HON. ANDY BARR, CHAIRMAN OF THE
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS, A U.S. REPRESENTATIVE
FROM KENTUCKY
Good morning.
Today's hearing continues this committee's work to combat
the growing threat of financial fraud and scams harming
American families, seniors, and small businesses across our
country.
Fraud and scam losses are not abstract statistics. They
represent retirement savings wiped out, college funds drained,
and small business savings accounts emptied overnight.
The scope of the problem is staggering. According to the
Federal Bureau of Investigation (FBI), Americans reported $16.6
billion in cybercrime losses in 2024, a 33 percent increase
over the prior year.
Criminals are becoming more sophisticated, leveraging
artificial intelligence, voice cloning, spoofed caller IDs,
fake investment platforms, and coordinated money mule networks.
They are exploiting social media platforms, telecommunications
infrastructure, and cross-border networks to deceive Americans
at scale.
Yet, even as these schemes often originate outside the
financial system--and frequently outside our borders--banks and
credit unions are often the last lines of defense.
Financial institutions of all sizes are devoting
substantial resources to fight fraud and scams. They are
investing heavily in data analytics, machine learning, and
artificial intelligence to detect suspicious activity within
milliseconds. They are deploying real-time transaction alerts
and customer education campaigns to encourage their customers
to remain vigilant and spot common flags before funds have left
their accounts.
Community banks and credit unions, despite having fewer
resources, are stepping up with employee training, enhanced
check verification procedures, and partnerships with local and
national law enforcement.
The Trump Administration has also taken significant steps
to address this escalating problem. President Trump's executive
order, ``Modernizing Payments to and from Americans' Bank
Accounts,'' directs Treasury to transition away from paper
checks, which are far more susceptible to theft and alteration,
and toward more secure electronic payments. This shift will
help safeguard Americans' tax refunds and benefits while
protecting taxpayer dollars from criminal activity.
President Trump has also removed barriers to American
leadership in artificial intelligence, recognizing that
innovation is essential if we are going to outpace
technologically savvy criminals but despite these efforts,
serious structural challenges remain.
First, our legal framework for information sharing is
outdated. Fraud today is networked, cross-institutional, and
real-time.
Yet privacy statutes, antitrust concerns, and uncertainty
under consumer reporting laws limit the ability of financial
institutions to share data in ways that could identify mule
networks and coordinated fraud patterns.
Second, funds availability rules under Regulation CC were
written for a very different era when the primary risk was
banks holding checks too long, not criminals exploiting
mandatory next-day availability to drain accounts before
investigations can detect fraud.
Third, our financial regulators often lack robust
understanding of artificial intelligence and machine learning,
preventing the establishment of clear guardrails for financial
institutions.
With well-defined expectations, financial institutions will
be better positioned to confidently adopt these technologies or
partner with innovative third parties to more effectively
detect and prevent fraud.
Last, law enforcement faces real constraints, including
insufficient penalties for fraudsters, limited resources, and
lack of coordination between Federal and local officials.
At the same time, we must also guard against proposals that
could unintentionally fuel more scams.
Placing liability on financial institutions when a customer
mistakenly authorizes a payment or transfer--often referred to
as scams--does not address the underlying root causes of scams
and could worsen the problem by increasing instances of first-
party criminal activity.
It would also impose significant financial strain on
smaller banks and credit unions which lack substantial profits
needed to absorb large scam-related losses.
Our focus today is straightforward: How do we empower
financial institutions to better deter, detect, and mitigate
fraud without creating perverse incentives or unintended harm?
I look forward to hearing from our witnesses and working
with my colleagues to strengthen our Nation's defenses against
financial fraud and scams.
With that, I yield back.
Chairman Barr. I now recognize the ranking member of the
subcommittee, Dr. Foster, for 4 minutes for an opening
statement.
OPENING STATEMENT OF HON. BILL FOSTER, RANKING MEMBER OF THE
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS, A U.S. REPRESENTATIVE
FROM ILLINOIS
Mr. Foster. Thank you, Chair Barr, and to our witnesses.
Today's hearing continues this committee's bipartisan focus
on solutions to counter the growing threat of fraud and scams
facing American consumers and financial institutions.
Federal agencies, including the FBI and Federal Trade
Commission (FTC), and numerous nongovernmental organizations
have increased their focus on frauds and scams in recent years.
In each report, it is made clear that scams and losses from
fraud are growing year after year as scams are moving online
and perpetrators are becoming more sophisticated.
As Chair Barr noted, the FBI's last Internet Crime Report
in 2024 reported losses of a staggering $16.6 billion from
cyber-enabled scams and fraud. During coronavirus disease
(COVID), the U.S. taxpayer lost well over $100 billion to scams
and identity scams.
When encompassing offline activity like check fraud and
information from victims that choose not to report their
losses, the number is actually much greater.
Today, we are going to be discussing what can be done to
support community banks and credit unions which often find
themselves as the last line of defense between consumers and
scammers. We will discuss what more financial institutions, and
this committee can do to fight scams and fraud, the role
agencies outside of our jurisdiction should play, and actions
that can be taken by other industry sectors to eliminate common
vectors for these activities.
Old school fraud persists, like check fraud, while scammers
are quickly adopting new tools, like artificial intelligence
and deepfakes, to more effectively falsify documents,
impersonate consumers, or create false pretenses that trick
Americans into sending their hard-earned money to bad actors.
Specifically, I worry about the role of impersonation and
identity fraud in the scam system.
In 2024, the Financial Crimes Enforcement Network, FinCEN,
published a report identifying more than 1.6 million Suspicious
Activity Reports implicating more than $212 billion in
transactions as linked to concerns with identity verification.
I would like to thank Congressman Sessions for his
partnership on H.R. 7270, the Stop Identity Fraud and Identity
Theft Act of 2026, which would help States build the necessary
infrastructure to offer a voluntary form of digital
identification for Americans that want it.
Digital identity tools are proven to be more secure and
privacy preserving than physical documents in an online
environment, and our bill would make important steps to provide
peace of mind to Americans who worry that the person on the
other end of the line may not be who they claim to be.
It is essential to also recognize the role that the
Consumer Financial Protection Bureau played in countering fraud
and scams, particularly for our servicemembers and older
Americans.
The Consumer Financial Protection Bureau (CFPB) long served
as a resource for Americans affected by these criminals,
providing assistance and operating their Consumer Complaint
Data base which provides important data regarding the types of
scams and other illegal activities facing the public.
This work is important, and this committee should put
pressure to restore the CFPB so that it can continue that
important work.
Many members of this committee recognize that congressional
efforts to counter fraud and scams cannot stop at the walls of
this committee. Telecom service providers and social media
platforms are common avenues for scammers to reach consumers.
Fighting scams require an all-of-government approach to be
successful, and we should recognize that. Many times, much of
the damage has been done by the time the consumer contacts the
financial institution.
Technological solutions, improved information-sharing
arrangements, and stronger Federal coordination provide a start
to address these issues.
So I look forward to hearing the views of our witnesses on
these topics.
I yield back.
Chairman Barr. The gentleman yields back.
I now recognize the chairman of the full committee, Mr.
Hill, for 1 minute for an opening statement.
STATEMENT OF HON. FRENCH HILL, CHAIRMAN OF THE COMMITTEE ON
FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM ARKANSAS
Chairman Hill. Thank you, Chairman Barr.
This is Consumer Protection Week, and I think I want to
commend you and Dr. Foster for holding this important hearing.
Fraud and scams are not a new challenge, but the scale and
complexity of the problem, as Bill just outlined, are
increasing rapidly, imposing greater costs on both American
families and on the financial services arena and on our small
businesses.
Americans reported losses of $12.5 billion in 2024, a 25
percent increase. In communities like my own in Little Rock, I
hear directly from bankers, small business owners, and
consumers who are grappling with check fraud, wire fraud, and
increasingly sophisticated digital scams. In our family, we
have been the victim of check fraud ourselves.
Our banks and credit unions serve on the front lines of
this fight, working every day to safeguard their customers, and
we need an all-of-government approach. That is why I commend
the work of this committee.
I yield back.
Chairman Barr. Thank you, Mr. Chairman. I commend your work
as well and your focus on this issue along with Mr. Meuser, the
chairman of our Oversight Subcommittee.
Today, we welcome the testimony of Mrs. Gay Dempsey, the
CEO of the Bank of Lincoln County, Tennessee, here on behalf of
the Independent Community Bankers of America.
Mr. Patrick McDade, the senior vice president for fraud and
technology risk management at EverBank, here on behalf of the
Consumer Bankers Association.
Ms. Kate McKune, the general counsel of Park Community
Credit Union in the great Commonwealth of Kentucky, here on
behalf of America's Credit Unions.
Kate and I have been friends for a long time.
So it is great to see you in front of our committee, Kate.
Mr. Joseph Schuster, a partner at Ballard Spahr and Mr.
Adam Rust, the director of financial services at the Consumer
Federation of America.
We thank each of you for taking the time to be here. Each
of you will be recognized for 5 minutes to give an oral
presentation of your testimony. Without objection, your written
statements will be made part of the record.
Mrs. Dempsey, you are now recognized for 5 minutes for your
oral remarks.
STATEMENT OF GAY DEMPSEY, CHIEF EXECUTIVE OFFICER, BANK OF
LINCOLN COUNTY, ON BEHALF OF THE INDEPENDENT COMMUNITY BANKERS
OF AMERICA (ICBA)
Mrs. Dempsey. Chairman Barr, Ranking Member Foster, and
members of the subcommittee, I am Gay Dempsey, the CEO of the
Bank of Lincoln County located in Fayetteville, Tennessee. We
are a $225 million bank in southern-middle Tennessee bordering
Alabama.
I am a member of the Board of Directors for ICBA and a
member of the Fraud and Scams Task Force. I am also actively
involved in the Tennessee Bankers Association where I am soon
to be chairman.
I testify today on behalf of ICBA and thousands of
community banks across our country. Thank you for convening
today's hearing.
I am a lifelong community banker, and I have witnessed
firsthand the impact of fraud on our customers and community
and have seen the financial ruin that fraud can produce.
Community banks like mine are on the front lines, spending
significant time and resources to educate customers and
identify and mitigate fraud but coordination among financial
institutions, law enforcement, and government at every level is
necessary to combat this urgent problem.
My written statement contains legislative and regulatory
recommendations, but I must stress that additional mandates on
community banks would only harm our ability to fight fraud. I
also provide a number of stories to illustrate the impact of
check fraud, imposter scams, and other schemes.
In recent years, we have seen a significant rise in check
fraud. A common thread in these cases is a failure of mail
security and a depositing bank that ignored red flags on
account opening and accepting deposits of stolen checks for
fake companies.
In some cases, lost funds were recovered after much effort
and delay. In others, we had to absorb the losses.
We have also seen a rise in imposter scams enabled by
unregulated social media platforms and bitcoin ATMs.
Our bank had an elderly customer with no family who fell
victim to a romance scam and sold her house for $85,000.
Spotting the red flags, we refused her request to wire the
money to the scammer and tried our best to convince her that
she was a victim, even showing her FBI reports.
In the end, we could not refuse her request to make a cash
withdrawal, which she deposited in a nearby bitcoin ATM and
transferred to the scammer.
This was heartbreaking, a preventable crime enabled by the
use of fake social media accounts.
The Safeguarding Consumers from Advertising Misconduct
(SCAM) Act, introduced by Representatives Meuser and Correa,
would begin to hold social media platforms accountable for
fraud like this.
Fraud losses disproportionately impact community banks
relative to our asset size. For a bank like ours, fraud
fundamentally impacts our ability to serve our local community.
Beyond the significant dollar losses, fraud is increasingly
absorbing focus and attention, stealing valuable time that we
should be spending with our customers but maybe more dangerous
is the intangible impact: the erosion of consumer trust in all
banks. This ironically leads consumers to seek out unregulated
nonbank alternatives that put them at even greater risk.
Community banks are built on strong relationships. This
sets us apart from larger transaction-oriented banks, and fraud
jeopardizes these critical relationships.
Given these high stakes, how are community banks
responding?
First, we are investing significant amounts in technology,
including AI, to detect fraud. These tools, which are important
but not foolproof, add significant cost for our bank.
One of the draft bills before this committee, the Bank
Fraud Technology Advancement Act, would require a comprehensive
agency study of the use of AI in fraud prevention. This study
would be valuable.
Second, we train our staff to spot fraud and report
suspicious activity. Our staff are the point of contact and
positioned to detect fraud early and intervene. Their training
is critical, but so are the personal relationships and the
knowledge they have. In our close-knit community, they are
truly the first line of defense.
At the industry level, Independent Community Bankers of
America (ICBA) created a Fraud and Scams Task Force that shares
information and best practices, meets with regulators, and
develops resources for our peers.
My statement also contains recommended changes to Fed
Regulation CC, which governs check clearance. This, along with
the draft Scrutinizing Transactions for Overt Payment Fraud
(STOP Fraud) Act, would help community banks mitigate check
fraud by providing more flexible hold times.
Finally, a third draft bill before this committee, the
Transaction Risk Analytics and Collaborative Exchange (TRACE)
Act, would expand critical information sharing while providing
safe harbors.
Thank you for your work on the draft bills and for
convening today's hearing.
[The prepared statement of Mrs. Dempsey follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Barr. Thank you.
I now recognize Patrick McDade for 5 minutes.
STATEMENT OF PATRICK McDADE, SENIOR VICE PRESIDENT FOR FRAUD
AND TECHNOLOGY RISK MANAGEMENT, EVERBANK, ON BEHALF OF THE
CONSUMER BANKERS ASSOCIATION (CBA)
Mr. McDade. Chairman Barr, Ranking Member Foster, and
members of the subcommittee, thank you for the opportunity to
testify.
My name is Patrick McDade, and I am the senior vice
president for fraud and technology risk management at EverBank.
Before joining EverBank, I spent over a decade as a State
and Federal prosecutor. I also serve as the chair of the
Consumer Bankers Association's Fraud Management Committee.
The CBA's broad membership has long been raising the alarm
about the rise in fraud and scams that are inflicting deep
financial and emotional harm on American consumers and small
businesses.
Banks invest billions of dollars and millions of hours to
combat fraudsters and scammers each year. However, banks cannot
face this growing threat alone.
In 2024, the FBI received more than 850,000 Internet Crime
Complaint Center (IC3) complaints involving losses of over $16
billion, which was a 33 percent increase over 2023.
However, while consumers expect a meaningful response to
these complaints, Government Accountability Office (GAO)
reports have revealed a lack of coordination among Federal
bodies to assist victims and prevent frauds and scams.
Meanwhile, the criminals behind these frauds and scams are
using AI, social media, and dark web platforms to coordinate
with each other and improve their attacks and techniques.
Historically, fraudsters have attacked the financial
services industry through traditional bank fraud methods:
identity theft, forging or altering checks, wire fraud, et
cetera.
More recently, these criminals have focused on emerging
digital bank platforms, fraudulently accessing accounts online
and making unauthorized payments.
Banks hardened their digital controls, developed data-
focused fraud tools, and strengthened digital security to
combat these emerging threats.
In response, today the criminals are focused on a new
tactic: Scams directed at our customers.
Frauds and scams are often conflated, as both use complex
schemes and deceptions to steal. However, it is important to
understand the differences between frauds and scams.
The key differences are who is being deceived and who is
authorizing the transactions.
As I described, in bank fraud, the criminals are trying to
deceive the bank and fraudulent transactions are sent.
With scams, however, the criminal is not deceiving the
bank--they are deceiving the customer. The customer believes
they urgently need to move money to invest, to help a loved
one, or to avoid a penalty. The customer then contacts the bank
and authorizes a transaction to move money.
Banks work hard to protect their customers in the Main
Street communities they serve from these scams. Banks monitor
unusual activity, educate customers about fraud and scams, and
train their staff to recognize red flags that indicate a
customer may be a scam victim.
Banks are doing what they can do to stop scams, but there
are several important steps that policymakers can take to help.
First, the Federal Government should establish a national
strategy to combat fraud and scams. Because so much of the
activity involving scams originates from social media,
telecommunications, and other places outside the financial
sector, this strategy must include cross-industry engagement.
One step toward accomplishing this could be an executive
order that includes unified coordination with the private
sector. While my written testimony provides more detail, such
an order could establish a centralized interagency reporting
and data-sharing infrastructure to streamline complaint intake
and response. This would provide immediate structural alignment
across agencies while longer-term legislative reforms are
developed.
To that end, CBA strongly supports many bipartisan and
bicameral efforts, including the leadership of Representative
Nunn through the Guidelines for User Age-Verification and
Responsible Dialogue (GUARD) Act and the Taskforce for
Recognizing and Averting Payment Scams (TRAPS) Act,
Representative Meuser through the SCAM Act, and other efforts,
such as Representative Kim's No More Shielding Corruption and
Misuse in Spending (SCAMS) Act. These represent important steps
in cross-agency coordination.
Congress should also expand safe harbor protections so
financial institutions can share real-time fraud and scam
threat intelligence without undue legal risk.
Federal regulatory frameworks must also be modernized,
including Reg CC.
Customer education is equally vital. Banks commit
significant resources to educate their customers about fraud
and scams, but a national fraud and scam awareness campaign
would make a substantive difference.
Finally, fraud and scams are currently reported to the
government through FinCEN's suspicious activity reporting
process. Transitioning to a modern fraud signal report would
lead to more valuable and actionable data-gathering by the
government.
The fraud and scam epidemic confronting American consumers
is not a series of isolated incidents. It is a rapidly
evolving, technology-accelerated global threat that inflicts
billions of dollars in losses each year and affects millions of
Americans in every district and Main Street consumers across
the country.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. McDade follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Barr. Thank you.
Ms. McKune, you are now recognized for 5 minutes.
STATEMENT OF KATE McKUNE, GENERAL COUNSEL, PARK COMMUNITY
CREDIT UNION, ON BEHALF OF AMERICA'S CREDIT UNIONS (ACU)
Ms. McKune. Good morning, Chairman Barr, Ranking Member
Foster, and members of the subcommittee.
I am Kate McKune, general counsel of Park Community Credit
Union in Louisville, Kentucky. I am pleased to appear before
you today on behalf of America's Credit Unions, where I serve
on the Fraud Task Force and the association's Advocacy Policy
Committee.
We applaud the subcommittee for holding this important
hearing today.
Financial institutions operate in an environment where
fraud and scams are becoming increasingly more prevalent.
Fraud encompasses a wide range of criminal tactics. Scams,
as a subset of fraud, often involve an element of impersonation
or trickery.
Both ultimately harm the consumer and the financial
institution and fall under the broader scope of fraud being
examined at this hearing today.
Credit unions like mine must contend with a fraud
environment where a large share of fraud and scams originate
outside of the financial sector, and criminal sophistication
continues to grow.
Credit unions are the original consumer protectors, and
that fact puts us at the forefront of looking out for our
members.
At the same time, consumers increasingly demand speed and
convenience as a core part of their banking experience.
Sometimes the only viable defense against fraud is
preventing it before it occurs, a process that can be
technologically demanding, expensive, and dependent on timely
information sharing between law enforcement, Federal
regulators, and other payment system stakeholders.
Despite significant investments in fraud detection tools,
consumer education, and data security, credit unions report
each year that fraud remains a top concern.
For smaller credit unions, a significant fraud loss could
impact the financial health of the institution.
As a not-for-profit cooperative, if regulatory standards on
liability for fraud were to shift the costs further to the
institution, our members would ultimately bear the burden.
Credit unions regularly work to adapt, innovate, and
educate their members about the variety of fraud and different
scams that can target them--although, oftentimes, no amount of
security investment or intervention can fully compensate for a
consumer's decision to trust a scammer.
One of the biggest challenges in combating fraud is that it
can come in so many different forms.
Romance scams can be difficult for a credit union to detect
and prevent because manipulation of the victim can take place
over a long period of time. Often, victims of romance scams
will genuinely believe that their online friend is a person
they can trust, and no amount of circumstantial evidence will
change their mind.
Fraudulent advertisements for fake goods and services are
another common vector for defrauding consumers.
Unfortunately, financial institutions have minimal control
over how online or social media entities manage their
advertising policies. As a result, we must resort to simply
warning consumers that completely anonymous, online, sight-
unseen purchases of goods could mean losing their money.
Investment scams and business impersonation scams have also
contributed to abnormally high fraud losses among consumers.
Often, these scams can involve cryptocurrencies or
impersonators pretending to work for crypto companies.
Check fraud has also increased in recent years. One way to
combat this would be to modernize the funds availability rules
under Regulation CC and create flexibility in the length of
time funds may be held if there are concerns about a check.
While the National Credit Union Administration (NCUA) also
provides resources to assist credit unions and their members in
the fight against fraud, America's Credit Unions supports
greater interagency coordination, expanded information-sharing
authority, and close collaboration with law enforcement to
address fraud.
We believe a national strategy to mitigate fraud should
include several key elements.
First, improving information sharing and coordination.
Bills such as the TRAPS Act and TRACE Act are important steps
in this area that would improve cooperation between public and
private sectors and law enforcement.
Second, a national consumer education campaign and program
from the Federal Government that partners with industry.
Third, modernization of funds availability rules.
Legislation such as the STOP Fraud Act would begin to make
improvements in this area.
Fourth, promotion of the use of technology, including AI,
to help combat fraud. The Bank Fraud Technology Advancement Act
is an important first step. We also support the creation of
technical assistance and grant programs to help smaller
financial institutions access best-in-class technology.
In conclusion, there is no magic bullet to stop fraud and
scams. At Park Community, we are on the front lines trying to
fight it and help our members, but the challenges are complex.
Often, criminals seek to manipulate the system and prey on
human nature.
There is only so much one institution can do alone. What is
needed is a commitment at the Federal level to work with credit
unions and other financial institutions to help combat fraud
and scams by using an all-of-government approach as outlined in
my testimony.
Thank you for holding this important hearing and for the
opportunity to appear before you today. I welcome any questions
you may have.
[The prepared statement of Ms. McKune follows:]
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Chairman Barr. Thank you.
Mr. Schuster, you are now recognized for 5 minutes.
STATEMENT OF JOSEPH J. SCHUSTER, PARTNER, BALLARD SPAHR LLP
Mr. Schuster. Thank you, and good morning. Chairman Barr,
Ranking Member Foster, and members of the subcommittee, thank
you for the opportunity to testify today.
My name is Joseph Schuster, and I am a partner in Ballard
Spahr's Consumer Financial Services Group, where I advise
banks, credit unions, payment companies, and technology
providers on Federal and State consumer finance laws.
A substantial portion of my practice focuses on fraud-and
scam-related matters, including payment fraud, identity-based
fraud, account takeover, check and wire fraud, scam typologies,
loss allocation, and legal and operational frameworks governing
fraud detection and response.
Throughout my testimony, two themes are going to be
pervasive. The first is the challenge of sharing information
effectively to prevent fraud. The second is the constraints
financial institutions face when deploying new tools to combat
rapidly evolving fraud schemes.
Fraud prevention today is inherently collaborative. It
depends on coordination among financial institutions, their
service providers, law enforcement, and in many cases cross-
industry information-sharing networks. Yet, these efforts take
place within a layered legal and supervisory framework.
Fraud mitigation is shaped not only by statutory regimes,
such as the Fair Credit Reporting Act and the Expedited Funds
Availability Act, but also by regulatory guidance, supervisory
expectations, and the practical realities of examinations and
investigative oversight.
Financial institutions must navigate Federal and State
compliance expectations and requirements while simultaneously
responding to increasingly sophisticated and fast-moving fraud
threats.
The interaction between Federal and State law can create
uncertainty in areas such as information sharing, funds
availability practices, fraud-related holds, consumer dispute
handling, and the use of advanced analytics.
Institutions operating nationally must reconcile these
overlapping regimes while responding to fraud schemes that do
not respect jurisdictional boundaries.
My testimony today reflects a legal practitioner's
perspective across institutions of varying sizes and business
models.
Fraud has evolved rapidly in recent years. At the same
time, many elements of the legal and supervisory framework were
developed in an era when fraud was slower, more siloed, and
certainly less technologically advanced.
The result is a growing tension between the speed and scale
of emerging fraud trends and the structure of the regulatory
architecture governing prevention efforts.
I appreciate the committee's attention to these issues, and
I look forward to discussing how policymakers can support
effective fraud mitigation while preserving consumer
protections, privacy, and fair access to financial services.
Thank you.
[The prepared statement of Mr. Schuster follows:]
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Chairman Barr. Thank you. The gentleman yields back.
Last but not least, Mr. Rust, you are now recognized for 5
minutes.
STATEMENT OF ADAM RUST, DIRECTOR OF FINANCIAL SERVICES,
CONSUMER FEDERATION OF AMERICA
Mr. Rust. Chairman Barr, Ranking Member Foster, and members
of the committee, thank you for the opportunity to testify
today.
My name is Adam Rust. I am director of financial services
for the Consumer Federation of America.
CFA is a nonprofit organization dedicated to serving the
consumer interests, with 215 nonprofit coalition members across
the country, and we house Veteran Saves and Military Saves to
help approximately 240,000 individuals build wealth.
Today, I want to talk about scams which are among the most
serious threats facing consumers today. You have heard about
the large numbers of losses. The numbers are truly much larger
because so many scams are never reported.
Scams affect people in every congressional district, of
every age, young, old, urban, rural, civilian and
servicemember.
I want to focus my testimony on five things Congress can
do.
First, attacks on the CFPB must end. The CFPB is the
primary Federal agency with the mandate and expertise for
consumer financial protection and authority for Electronic Fund
Transfer Act (EFTA) and Unfair, Deceptive, or Abusive Acts or
Practices (UDAAP). Its Complaint Data base receives complaints
from harmed consumers. This information can be shared with law
enforcement and other concerned parties.
When consumers are harmed, the CFPB has sent a clear
signal: When companies offer unsafe products, there will be
consequences, but that signal has been silenced by dropping
enforcement, gutting supervision, and firing staff. The
consumers' champion has been taken off the beat and Congress
overturned the rule requiring supervision of payment apps and
digital wallets.
Consumer relief rates have dropped precipitously, from
approximately 50 percent 2 years ago to now less than 1
percent.
Second, EFTA is broken for scam victims. EFTA was written
in 1978 when electronic theft meant a stolen ATM card. Today's
criminals coerce victims into authorizing transfers where there
is little recourse under the law.
CFA supports the Protecting Consumers from Payment Scams
Act, which would expand coverage to wires, call for shared
liability, and create protections against induced transfers.
The bill will modernize EFTA to actually address how scams work
now.
Third, every company across the payment journey should be
accountable and a part of the solution. For every scam, there
is a destination: a bank or a payment app of the criminal.
Criminals deliberately target FIs with weak fraud detection to
help them find ways to open accounts and receive funds and then
later move it on for funnel accounts.
Suspicious Activity Report (SAR) filings on funnel accounts
have increased fourfold since 2020, and bank fintech
partnerships, such as the example of the Synapse case, are a
critical point of vulnerability.
True, send-side FIs do not have the full picture. Receive-
side FIs and payment networks have a unique line of sight with
directory information as well. Let us connect those sight
lines.
More use of real-time AI, better information sharing, and
possibly the expulsion of stubbornly risk-leaning FIs would
improve the ecosystem's safety for everyone. The U.K. has shown
that shared liability works.
The problem has many surfaces, and every actor--banks,
nonbank apps, networks, platforms, telcos--all must have skin
in the game.
Fourth, we must bridge the gap between illicit finance
enforcement and consumer protection. The types of criminal
organizations that have historically been the subject of Bank
Secrecy Act (BSA) and anti-money laundering (AML) violations
are now open for a new line of business: scamming Americans.
Yet, BSA enforcement actions and consumer protection work
have been in silos. That should change. The CFPB should be in
the room, and penalties resulting from violations should
include remedies for scam victims.
Fifth, we should make efficient use of SARs. Much of the
most useful information in a SAR is buried in narrative fields,
where law enforcement has difficult times to access it at
scale.
To help law enforcement, FinCEN should migrate more data to
structured formats and add a scam check box with device and
account identifiers to permit appending and tracking across
financial institutions.
The dark web is not calling for higher reporting
thresholds. Neither should we. It would be blind for law
enforcement to many transactions, including some that affect
lower-dollar transactions such as teen sextortion.
The tools to fix this problem exist. Restoring the Bureau,
sharing liability, removing silos, and making better use of
SARs will strengthen our defenses.
Thank you.
[The prepared statement of Mr. Rust follows:]
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Chairman Barr. The gentleman's time has expired.
We will now turn to member questions. I recognize myself
for 5 minutes for questioning, and I will start with Mrs.
Dempsey.
The recommendation of the STOP Fraud Act or updates to Reg
CC to allow for exceptions in terms of holds, allowing more
holds for scrutinizing wire transfers or suspicious checks. We
hear a lot about--especially from community banks--concerns
about rewards in payment stablecoins. This seems to kind of go
in the opposite direction but I think banks will always--and
credit unions, frankly--all community financial institutions
will always be here, even with the advent of blockchain
technology and stablecoins, because of the fraud prevention
that you all and the trust that you all create and why you are
even more important in the ecosystem with the advent of
stablecoins.
Can you talk about that? Does this--I think it is a good
idea to give you more flexibility on holds, but does that work
at cross-purposes in terms of the concern about
disintermediation?
Mrs. Dempsey. It is a broad question.
On the Reg CC side for holds, yes, definitely giving more
leeway there for the banks.
The language right now is a little vague on if you have a
reasonable cause to place a hold for longer, a longer period of
time. So a lot of banks are not apt to use that to extend their
hold times when they see those fraudulent checks when they come
in.
With checks 21 years ago, everybody thought checks were
just going to clear instantly and that you would be able to
catch those fraudulent checks that were presented into the
system, but we still see that it can take several days
sometimes for a check to clear.
Also, it takes a lot of time, especially when you are
talking about altered checks that have occurred in the mail,
for the small businesses, that they may have been stolen out of
the mail and then come out of their account.
I would love for them to check those accounts every single
day and to make sure that the payee matches who they sent it
to, but, unfortunately, they just do not.
Even with the education that we provide to those small
businesses--we host small business luncheons to train on fraud
and scams and to show them what to look for--but when you
extend that hold time, it gives that customer even more time to
check their online banking, to look at those accounts, and then
for us to return those. Because that is one of the hardest
things, is the midnight return that we have with checks and
dealing with trying to mitigate those and to solve those.
Chairman Barr. Well, just to sum up, we are embracing the
innovation and moving toward a more frictionless payment
system, obviously, with the GENIUS Act, but banks and credit
unions will always be needed, I think, to build in wanted and
needed friction to prevent fraud.
Mr. Schuster, I have heard from financial institutions that
when they implement robust fraud controls, they can face
allegations of unfairness or abusiveness under CFPB's UDAAP
authorities, especially when interventions might create
necessary friction for customers.
My Rectifying UDAAP Act requires the CFPB to provide clear
standards for what constitutes a UDAAP violation, giving
financial institutions the clarity they need to serve
customers, including protecting them from fraud and scams.
From a legal perspective, how does UDAAP risk currently
influence institutions' willingness to deploy proactive risk-
based fraud controls and do you think that greater clarity in
the form of my bill, the Rectifying UDAAP Act, would reduce
hesitation around reasonable, good-faith fraud interventions?
Mr. Schuster. Thank you. It is a great question. Yes, your
act would certainly help financial institutions.
They right now face the decision of am I going to address
this fraud or scam as it currently exists under existing
statutory law but risk being criticized from an unfairness or
an abusive perspective from their regulators and supervisors,
and they will many times look at the potential financial impact
to them of a compliance rating versus providing money to an
individual who has been taken advantage of by a scam.
When they are implementing tools, it is the same thing,
that regulators are not looking at how artificial intelligence
works, advanced technologies work. They have an aversion to
doing that, and there is a belief that is unfair, that is
abusive. They need to look at that, and your bill would
certainly help.
Chairman Barr. Ms. McKune, your testimony was that Park
Community Credit Union prevented more than a million in fraud
losses for your members. That is fantastic.
Can you describe in more detail what those fraud attempts
look like on a day-to-day basis and the staff time, compliance
oversight, and technology investment that is required to manage
all of this?
Ms. McKune. Thank you, Chairman.
We work every day to run investigations quickly. We have
full-time fraud staff. We have deployed technology to catch and
alert and indicate to us where there might be suspicious
activity.
We have, obviously, a compliance team that works hand in
hand with the fraud team to ensure that we are meeting our
compliance and regulatory obligations in that regard.
There is a sign in our fraud department that says: How many
days since the last fraud incident? It never leaves zero
because what we do every day is keep vigil and work to
investigate to see whether we are having an individual problem,
whether we are seeing multiple members affected by a scam. So
we are very conscientious about balancing their needs with the
burden on our side to ensure we are protecting them.
Chairman Barr. Thank you. I know it is a very costly
enterprise.
My time has expired. Dr. Foster is recognized for 5
minutes.
Mr. Foster. Thank you, Mr. Chair.
Mr. McDade or Mr. Rust, as I mentioned in my testimony,
identity fraud and impersonations are crucial to every one of
these scams and they are becoming a greater threat to American
consumers, particularly with the proliferation of artificial
intelligence and deepfakes.
Not only are the scammers able to reach more potential
victims by automating these, but their scams are much more
sophisticated. The old schemes of having typo-ridden emails
claiming you are the beneficiary from a distant relative have
sort of been replaced by very sophisticated impersonations,
which can be online videos, things like that.
It is only going to get worse. The rise of agentic AI is
going to generate a huge new wave of these frauds where, when
my agent starts talking to your agent to do a business deal or
to just communicate, the very first question is going to be:
How do I know you are who you say you are and not some scammer?
So I think that having a secure digital identity for
Americans that want to be able to prove they are who they say
they are is going to be a crucial tool.
I worry that America is falling behind the rest of the
world in this because, by the end of this year, every citizen
of the EU, if they wish, will have a tool to get out their cell
phone, smile at it, do the biometric log-in, present an
identity app that proves they are who they say they are.
In the absence of any action by the Federal Government,
States are rolling out digital driver's licenses. Sort of
ironically, it is the National Institute of Standards and
Technology--the U.S. standards--that are being deployed all
around the world. They are on every iPhone and every Android,
but we are not using them federally to prevent identity scams.
So I think that is a real missed opportunity that we would like
to.
Also, Mrs. Dempsey, you highlighted bitcoin ATMs. I would
urge every member of this committee to just go look at their
hometown, do it on Google Maps, and then go do a search for
bitcoin ATMs. Then maybe do a search for where all the nearby
fentanyl deaths have been and see if the maps look kind of
similar. These are tools by drug dealers, they are tools by
scammers, and we have to do something about that.
During the previous Trump Administration, actually,
Secretary Mnuchin had the simple suggestion that why do not we
have mandatory Know Your Customer (KYC) on all crypto wallets,
which I think would solve a big part of this problem anyway.
So any thoughts you have on that, Mrs. Dempsey? What should
we do about the bitcoin ATMs? Because they are not a small
problem.
Mrs. Dempsey. Yes. The bitcoin ATMs, in my opinion, are
just nefarious, and there is nothing good in our community
taking place at a bitcoin ATM. There is no need for them.
To your point, once they enter that, they are gone. There
is no tracking. From where we stand, there is no getting that
back.
So I know there are several States that have enacted laws.
Our State is currently entertaining some laws dealing with
bitcoin ATMs and placing limits on them and placing warnings on
them to help educate the consumers and to protect them.
Mr. Foster. Yes, but that is not going to help someone who
has been scammed, a romance scam. I know, I am familiar with a
bar owner who was given a couple hundred bucks a week to put a
bitcoin ATM in their bar, and after a couple weeks he said,
``Get this the heck out of my bar'' because he was sick and
tired of seeing elderly people pouring their life savings down
the bitcoin ATM crying as they did it.
Mrs. Dempsey. Yes. If there were regulations, even if they
did put it in the ATM, where they had a certain amount of time
to get it back, even things of that nature could help protect
them when they fall victim to those scams.
Mr. Foster. Mr. Rust, how would you generally rate the
position of U.S. citizens in terms of being able to prove they
are who they say they are, to know that the person they are
talking to is a real person in an online environment? How does
that----
Mr. Rust. So this problem is not working now and getting
worse. You can imagine with deepfakes and voice cloning that
fraudsters are going to gain new advantages to harm people.
That seems inevitable.
Probably the best--Michael Hsu made the point that the best
way to fight AI fraud is with AI technology, supervisory tech
but we need to invest in that. We need to be able to buy those
from regulators to have the tools that the fraudsters have.
Mr. Foster. Does anyone know--have comments on where AI--
the thing that interests me are these personal AI assistants
that everyone is going to use, which could be the last and best
line of defense. So when you get that first phishing scam mail,
you have your personal AI assistant say ``warning,'' warn you
so that your elderly parents will never even receive that scam
communication.
Are there efforts ongoing to make personal assistants that
will filter that stuff properly, or is that another missed
opportunity?
Mr. Rust. I mean, this is about having bots to stop bots,
and with more platform involvement it will be more urgent.
Mr. Foster. Thank you. Yield back.
Mr. Meuser [presiding]. The gentleman yields back.
The gentleman from Arkansas, the chairman of the full
Financial Services Committee, Chairman Hill, is now recognized
for 5 minutes.
Chairman Hill. Thank you, Mr. Meuser. Appreciate that.
Let me start with you, Mr. Schuster.
This has been a good discussion so far, but I wanted to get
into this idea of collaborating to fight fraud.
Under the Fair Credit Reporting Act, entities that
aggregate consumer information and provide outputs used to make
eligibility determinants are often deemed consumer reporting
agencies, which carries a lot of compliance regulations and
compliance burden, which is probably right, including
responsibility for accuracy and dispute resolution and things
of that nature but we also are seeing a lot of financial
institutions explore this kind of consortium-based fraud
fighting.
When I was a banker, we had a phone call every Wednesday in
my hometown, and it was an off-the-record phone call that
probably does not comply with Federal law or regulation, but it
was essentially the ops people in every bank in town saying,
``Have you seen somebody wander into the lobby that is doing
this?''
It is an early warning system, and it is, like, classic
American protecting the community, working with each other in a
consortium basis but were we to do that in an analytic way
using some sort of a more formal system, do you see that people
are afraid to do that because of falling under the--that shared
information falls under that consumer reporting agency
designation? What could we do about that?
Mr. Schuster. It is a great question.
Fraud identification is inherently pattern recognition. The
more information and data that you have, the easier it is to
identify patterns that are abnormal, where there is fraudulent
activity happening.
Currently, the Fair Credit Reporting Act has very broad
definitions, and financial institutions, their service
providers, technology providers are hesitant to share data that
they have that could be used for that pattern recognition, the
fraud identification, earlier.
If there were clarity or a safe harbor under the Fair
Credit Reporting Act about sharing data for fraud or how that
data could be shared, it would vastly improve financial
institutions' and all these other companies' ability to share
that data and have it available to prevent fraud.
Chairman Hill. Thank you. That is helpful. If you have got
specific ideas of how one might craft a safe harbor like that,
I hope you will share those with the committee.
Ms. McKune, let me turn to you from an institution point of
view.
We know that scamming, as we have all heard today, has
become more sophisticated, using AI and deepfakes and forged
documents, and we have got people wandering in courthouses and
wandering in bitcoin ATMs and wandering into banks. We know all
that, and we are all trying to come up with the best whole-of-
government approach to fighting that, but a lot of it falls
right back to those financial institutions.
Are you trying to use these promising technologies to fight
against the scammers that are using technology and do you have
comfort with that? Do you have a lack of training? Do you have
a lack of talent in your institutions? Tell me a little bit
about that.
Ms. McKune. Thank you for your question, Mr. Chairman.
We certainly are trying to use technology prudently,
cautiously, thoughtfully. We want to make sure that we are at
least trying to keep pace with the fraudsters.
There is always a question in small financial institutions
of the cost and of the adoption and of the relative
sophistication of both our members and the fraud community in
which we sit but we do want to be able to respond faster and
all of those tools--the all-of-government approach, the
regulatory reforms, possibly safe harbors--would play into our
layered approach.
Technology is a piece of it, but one of the things that we
try to pride ourselves on as credit unions is our ongoing
member-to-member--our relationship with our members and our
ability to see them and see what is an aberrant transaction,
and try to use our judgment.
Chairman Hill. On a share draft--passing a check that has
been washed, for example--are you seeing good cooperation for
filing a police report in your area? Are you seeing postal
inspectors being helpful or local Secret Service? Tell me about
that.
Ms. McKune. We are always grateful for the law enforcement
engagement that we have. We often run up against law
enforcement's limitations in terms of resources and their
ability to drill in on the harm that we are seeing.
One of the things I think is really important to note is
that the number of resources that law enforcement can invest
often is tied to the amount of the loss, and the amount of the
loss could be absolutely ruinous and devastating for our
individual members and not be of a size or of a frequency that
law enforcement can really lean in.
Chairman Hill. Thank you very much.
I yield back, Mr. Chairman.
Mr. Meuser. The gentleman yields back.
The gentlewoman from California, the ranking member of the
full committee, Ms. Waters, is now recognized for 5 minutes.
Ms. Waters. Thank you very much. Absolutely delighted to be
here at this hearing. I am so surprised that the opposite side
of the aisle have decided to talk about fraud and abuse.
Since Trump and his return to the White House, Trump and
his family have made billions thanks to their growing meme coin
schemes. At the same time, families are more vulnerable than
ever to financial abuse as Trump pushes a reckless deregulatory
agenda.
He has dismantled the CFPB--that is the Consumer Financial
Protection Bureau--rolled back consumer protections, and
dropped lawsuits against big banks and crypto scammers, making
it easier to cheat everyone--from retirees, students, and
working families--while he and his family cash in.
Mr. Barr's bill would weaken UDAAP--that is U-D-A-A-P--
authority to the detriment of consumers. Of course, we need
stronger protections, not less and I just want to raise a
question about all of this that we see coming at the very top
of government.
Mr. Rust, we have been getting mixed messages from
President Trump where, on one hand, he claims to care about the
affordability crisis and says Congress should enact a law to
cap excessive credit card interest rates at 10 percent, but on
the other hand, he says it is a hoax and has worked with
congressional Republicans to slash the budget of the Consumer
Financial Protection Bureau, the Federal watchdog for consumers
in the financial marketplace. They have also blocked rules like
curbing excessive credit card fees.
So, Mr. Rust, when the CFPB issued its larger participant
rule to supervise Big Tech payment apps, banking groups were
supportive of the effort as a way to level the playing field.
Should Congress revisit this issue and require the CFPB to
immediately begin examining the large payment apps and mobile
wallets provided by Big Tech? Could this help identify payment
scams happening on these apps sooner?
Mr. Rust. Thank you for the question.
Yes, absolutely, Congress should restore the CFPB's
authority to supervise payment apps and digital wallets. This
is sort of the baseline way to address scams. Access to looking
at the activity on these networks is how regulators can spot
things, how law enforcement can spot things.
UDAAP is the tool we have if EFTA is not restored to
protect consumers. UDAAP was the tool used for the Zelle
enforcement action. Again, the CFPB needs to be back in the
game.
Ms. Waters. Well, thank you very much.
I am going to go back to the CFPB because many of us have
worked so hard. In Dodd-Frank, we gave the CFPB authority to
stop unfair, deceptive, and abusive acts and practices by bad
actors.
So if the Congress of the United States wanted to do
something about fraud, unfair, deceptive, and abusive acts, why
do not we just make sure that the CFPB can do what we organized
it to do rather than being attacked constantly by the opposite
side of the aisle and the President of the United States of
America? Would it not be just simple to allow them to do what
we organized them to do?
Mr. Rust. We should immediately restore full funding for
the CFPB.
Ms. Waters. Are you aware of the CFPB and how much money
they have returned to consumers?
Mr. Rust. The CFPB has returned over $19 billion to
consumers. That is a direct way to benefit consumers. I cannot
think of something that makes a greater difference than when
you have been harmed and an agency is responsive the way that
CFPB is.
Ms. Waters. I consider this one of the most dangerous
things that have been done by the President of the United
States of America, with a clear message to consumers to say
that he cares about the big boys who are ripping off and who
are creating this fraud and does not care about the consumers
whom we, on this side of the aisle, have tried to protect. We
have worked very, very hard.
I am so pleased that you are here today, that everybody is
here today. Let the truth come out. Let the truth come out and
people know where the fraud is really coming from and that the
opposite side of the aisle is not doing a darn thing about it.
Chairman Barr [presiding]. Well, reforming UDAAP would be
helpful.
The gentleman from Texas, Mr. Williams, is now recognized.
Mr. Williams of Texas. Thank you, Mr. Chairman.
I thank all of you for being here today.
I am a small business owner in Texas, and for 57 years
community banks and credit unions have kept me going every
single day.
Many scams targeting small businesses involve criminals
impersonating vendors, bankers, or contractors, and these scams
often start through spoofed phone calls, email promises, and PR
social media messaging before the transaction even reaches the
banking system.
Once the payment is sent through wires or peer-to-peer
transfers, it can be extremely difficult, as we have heard
already, to recover these funds.
So, Mr. McDade, how frequently are banks seeing this type
of fraud against their small business clients, like myself, and
what warning signs would small businesses look out for?
Mr. McDade. Thank you for the question.
Banks are, unfortunately, seeing this very often, and it is
only increasing.
Recently, we have seen very specific impersonation scams
that are related, unfortunately, to the Paycheck Protection
Program (PPP) loans that were taken out to help small
businesses during COVID.
A lot of that information is posted publicly in many
places, and so the scammers are able to go out on the web and
locate where these small businesses bank through their PPP
loans.
They can even go so far as to get who the individuals are,
in many cases, working at these small businesses, their
information. They can then call the banks representing that
they are that person and learn who their relationship manager
is.
They will then spoof the banks' phone numbers and try to
contact these small businesspeople to perpetrate fraud. They
will get a text message saying: Did you send this wire to
another company? Yes or no? They will respond no, and they will
immediately get a call from somebody representing that they are
the very bank that they bank with.
Unfortunately, they are talking to a scammer and this
scammer then will tell them: To make sure you are who you say
you are, please read back the code that I am sending you. That
code will be, unfortunately, a one-time pass code as the
scammer is trying to access the person's account online and do
an account takeover.
This sort of activity is becoming rampant, and these
impersonation scams are especially dangerous because they are
also eroding the trust between the financial institutions and
our own customers.
What banks are doing in response is we are educating our
customers. Our specific bank reached out to all of our PPP
customers and let them know about this scam. We encouraged
them, if you ever get a call or a text from our bank that does
not seem correct, call your relationship manager back directly
and talk to that person.
I can tell you, from my experience on the CBA's Fraud
Management Committee, it is not just our bank. It is all the
banks on the committee who have small business relationships
are seeing this exactly same thing, and the collaboration that
the CBA brings between us is really helpful.
Mr. Williams of Texas. Okay. Thank you.
Community banks play an important role in protecting your
customers from fraud, but they are also dealing with a growing
wave of check fraud, including checks stolen from the mail,
altered checks, and counterfeit cashier's checks.
When fraud occurs, smaller institutions often have to spend
significant time and resources investigating claims, navigating
liability disputes between financial institutions, and
attempting to recover funds, and that puts people like me on
the back burner to get a loan that we may need.
So, Mrs. Dempsey, when a community bank spends time and
resources dealing with check fraud disputes, what does that
mean for their ability to focus on serving customers, like our
small businesspeople across this country, and lending in their
communities?
Mrs. Dempsey. Thank you for the question.
You are correct. Check fraud, especially in a small bank
like mine, takes a tremendous amount of time and the majority
of the check, as Ms. McKune referred to, so many times the
checks are of an amount that it is not going to engage law
enforcement, and it is also not going to warrant us fighting
legal battles to try and get that money back. So it is taking
all that time to work through that process.
I will say, for our bank, if you had a check stolen out of
the mail, we give you money or give you credit back immediately
to your account when you identify that. So we work really
closely with our customers to not put them in a position of not
having access to those funds but you are correct; it takes a
tremendous amount of my time, from the CEO down to all of our
operations department to our front line, in dealing with that
daily and then working with those customers to do that, and
that is time that we could use working with our small business
owners, showing them new AI, new things that they can use, new
payment systems that they can use to help them be more
efficient and to grow their businesses.
Mr. Williams of Texas. Thank you.
Ms. McKune, I have a short time to go here, but in your
testimony you highlighted the importance of consumer education.
What types of outreach have credit unions found most
effective in helping members recognize fraud attempts?
Ms. McKune. Thank you, Congressman.
We have tried to use multiple approaches to ensure that
different messages are getting through and that the most
important messages do not get lost in a lot of communications.
So we often will put information in our social media, we will
put information about active scams as banners on our website,
as landing pages on our online banking but we also do a lot of
work. We are a community development financial institution, and
we do a tremendous amount of work in our communities to try to
ensure that folks understand what risks are out there and how
their accounts really work.
Mr. Williams of Texas. Thank you. My time has expired.
Chairman Barr. The gentleman yields.
The gentleman from Georgia, Mr. Scott, is now recognized
for 5 minutes.
Mr. Scott. Yes. Thank you, Chairman.
Mr. Rust, let us get to the heart of the matter.
In your opinion, what is the level of damage this is doing
to our overall economy?
You mention a lot of this rests in what you refer to as
this critical gap. What do you mean by that? What is the level
of economic damage that our failure to address this critical
gap that you talk about?
Mr. Rust. Thank you for the question.
Mr. Scott. What is the damage? Go ahead.
Mr. Rust. We see reports of $16 billion in fraud losses,
but research suggests that is possibly even 20 times less than
the actual number because people feel shame, people do not know
where to go, so they do not report it. The impact on their
household is destabilizing, possibly crushing, so that affects
our economy.
The critical gap? I see a critical gap between the work
that is occurring to stop some of these overseas criminal
organizations that are already working to move money, money
laundering, human trafficking, they are also doing scams. That
is their new line of business, and we should be eliminating
silos between consumer protection agencies and those agencies,
and possibly we should also be thinking about when there are
enforcement penalties for BSA/AML violations, that if there are
scam victims involved, that should be a way that they receive a
remedy.
Mr. Scott. What do you feel we here in Congress can do
about this? I mean, are we doing enough? Do we address this
critical gap through legislation or is this a money problem of
us not punishing these persons who are doing this wrongness?
Mr. Rust. So, yes, sir, I believe this is a bipartisan
solution. I believe there is bipartisan interest to fix this.
Congress can do a number of things. They should refund the
CFPB to begin with. They should restore the payment app rule,
that would make a big difference. I think they should look at
many of the solutions you have heard about, information sharing
and giving more line of sight between institutions.
Because all of this involves networks. This never is just
the send side. It is always receive side as well. So we can
make changes. Congress can do a lot.
Mr. Scott. Yes. So you feel there is nothing more that we
need to do as far as dealing with the Bank Secrecy Act itself?
Are there things we need to do to make it stronger, or do you
feel that the act is doing enough?
Mr. Rust. Well, there is plenty that could be done on that
side because that is where law enforcement, where those
organizations are sharing information, receiving SARs,
assessing problems, and highlighting it for other
organizations.
So, for example, the conversation about SARs is really
central here, and providing ways for that information to
highlight scams I think is critical.
Mr. Scott. Well, thank you very much.
I think we need to really focus on what we can do about
this, because if we cannot deal with this, the critical gaps
that you are talking about here, there are things we have got
to do here in Congress to address this.
So I appreciate your comments. Thank you.
Mr. Rust. Thank you, sir.
Chairman Barr. The gentleman yields.
The gentleman from Michigan, the vice chair of the
committee, Mr. Huizenga, is now recognized.
Mr. Huizenga. Thank you, Chairman Barr.
With readily available information and images that are out
in the general public on the internet and other places, there
are many, many people who are victims as both scam targets and
as vehicles to go after those victims.
A couple of years ago our office heard from someone whose
mother was in an online relationship with an individual. I will
call that individual Individual A. While using AI, the scammers
put Individual A's face on a decorated military officer's body,
put that face on someone who was being cared for in a hospital,
and it is amazing, really, truly unbelievable how authentic the
images looked, because I was Individual A.
To be clear, there was no online relationship. It was
someone who had taken my readily available information and my
images and had used AI. I think it just demonstrates that,
frankly, no one is above being caught up in those scams that
are going on right now.
Sadly, the individual's mother had sent thousands of
dollars to someone in Vietnam. We worked with Facebook where
the images had appeared to have them removed, but they kept
reappearing.
Mr. Schuster, I am curious, how much fraud originates
actually outside the banking system entirely, such as with
social media, telecom networks, or overseas criminal
operations?
Mr. Schuster. It is a great question. I think the majority
of it.
Financial institutions at the end of the day are just where
the funds ultimately derive for the scams, for the fraud, that
originates elsewhere.
What used to be in a physical place that somebody was
obtaining money is now all digital. Payments are faster than
they have ever been.
Those technologies that you are talking about are what are
used to start fraud, and financial institutions need the
abilities to do that pattern recognition. They need clear
guidance.
Their regulators need to permit them to use these
technologies from a UDAAP perspective and other things, so that
if there is something that is happening that happened upstream
from the financial institution--which is where it originates--
they can address it.
Mr. Huizenga. If most scams originate outside of financial
institutions and payment networks, is it fair to place the
majority of regulatory burden on those banks and payment
providers?
Mr. Schuster. I think it would be great if we gave those
financial institutions and payment providers more tools even
before we think about liability.
I think that we are thinking about liability after a fraud
or a scam has occurred. If there is something that they can do
to help people prevent these types of things, that would be
great.
I also think that looking at some of those other areas that
you have been discussing, social media and elsewhere, that is
where there should be focus, too.
Mr. Huizenga. I do want to hear from our bankers, as well.
Very quickly, how do you think we can improve consumer
education and outreach on fraud and scams?
Mr. Schuster. I think that it is something that if
financial institutions are given the tools, or less restraints
with respect to how they can look at these items and what they
can do to communicate with their customers from data that they
have from other institutions, from their service providers,
from financial institutions, they will be able to share more
specific information and education with consumers that will be
extremely helpful.
Mr. Huizenga. How about Mrs. Dempsey and Ms. McKune?
By the way, Ms. McKune, I am going to take point of
personal pride here. My future daughter-in-law happens to be
from Danville, Kentucky.
For those of you not aware, Danville is quite a small town,
as I understand. So I am looking forward to having her in the
family soon, but what is your experience with your customers?
Ms. McKune. One of the things that we think is really key
is the ability to share information more broadly. When we are
constrained, even in just dealing with our respective
counterparts in the banking realm and financial institutions,
the information we can share is limited and the information
that would be helpful is often out of our reach.
We are talking about a very time-sensitive exercise, and we
are talking about something that happens really quickly, and
with regulatory constraints on how long we can find a pause,
that is difficult.
I think it is worth exploring information sharing that goes
beyond thinking about financial institutions because so much
fraud originates in spaces for which we do not have a vantage
point.
Mr. Huizenga. Mrs. Dempsey, 10 seconds.
Mrs. Dempsey. I would just concur. More information sharing
is critical between banks.
We have had experiences with banks where we call and they
will not give us any information just because of fear of the
sharing information, even though it should fall under the
current regs now that they are able to share with us and they
do not and then just she mentioned consumer education. We are
constantly educating, whether it is through in-person, whether
it is through luncheons, online, face-to-face. I have been on
the radio. We have weekly articles in our local newspapers.
So we are doing everything that we can to make consumers
aware of the frauds and scams that are out there, but they
change every day.
Mr. Huizenga. Thank you. I yield back.
Chairman Barr. The gentleman from California, Mr. Sherman,
is now recognized.
Mr. Sherman. Consumers face two kinds of rip-offs: those
from big institutions that do provide a useful service but
sometimes engage in misleading and confusing practices.
The chief defense here was the CFPB, which provided almost
$20 billion in returned money, $5 billion in civil penalties,
$363 million back to veterans and that is just the retribution
part. Think of the deterrence. Think of all the scams that
never happened. Think of all the corporations that said, ``We
will never get away with that.''
So we should not defund those who police our streets. We
cannot defund those who police the suites, the corporate suites
but today's hearing tends to focus on the full-time criminals
who provide no useful services at all, just rip people off.
Mr. Rust, thank you, first, for the work of the Consumer
Federation of America over the many decades. You have talked
about the Suspicious Activity Reports that financial
institutions file and the need to allow law enforcement to see
patterns, to look not at just one item, but what is happening
across the country.
We could provide that the Suspicious Activity Report
includes at least two identifiers, both a driver's license
number and a Social Security number or a passport number.
We could reduce the importance of the narrative portion of
the report that cannot be correlated with other reports and go
more to structured fields.
What can we do to make sure that a Suspicious Activity
Report does not just tell you about one instance, but allows
you to link it with what is happening elsewhere?
Mr. Rust. So this is about appending data and being able to
see patterns. Structured information is great for searching. If
you are familiar with the Home Mortgage Disclosure Act, that
database, everything in it is searchable. It is all structured.
If you are a local law enforcement agency working in a
State, the ability to search for where that scam occurred is
very valuable.
The ability to see where funds have transferred across
financial institutions, you need to be able to track account
numbers, device IDs, things like that. Those are tools that law
enforcement needs to build cases against these kinds of
situations.
So SARs are a tool where the underlying facts can lead to
subpoenas that can lead to stopping the problems.
Mr. Sherman. Thank you.
I want to commend our ranking member for his idea that we
need Know Your Customer to apply to all of the wallets, crypto
wallets.
One issue comes up where an entity impersonates a financial
institution. Reuters claimed that Meta had 10 percent of its
revenue, roughly $16 billion, derive from advertisements for
scams and banned goods.
Credit unions came to my office and identified a system
where a scammer pretends to be your credit union or your bank,
so you trust them, and all of a sudden you are wiring $500, you
are giving out information. A lot of this comes from
advertisements where Meta will let you pretend to be a
financial institution when you are really not.
Mr. McDade, what can be done to make sure that Meta and
similar organizations are not running ads in the name of a
financial institution when it is really a criminal?
Mr. McDade. Well, I would first point to the SCAM Act
sponsored by Representative Meuser. The reality is we are
absolutely correct that one of the largest threats that we have
is banks, the misinformation that happens outside of our
control environment. Most of the scams----
Mr. Sherman. And you live with Know Your Customer and Meta
does not know anything about its advertiser.
Mr. McDade. Well, that is correct. The study that you cited
specifically notes that it is a situation where Meta is putting
forth knowingly fraud information into the ecosystem.
Mr. Sherman. Got you.
I want to get one other thing, and that is we need payee
matching so that when you wire money to account number 12345,
because it is supposed to go to Santa Barbara escrow, that is
an account of Santa Barbara escrow.
Because we have seen again and again people lose their down
payments, somebody is impersonating the escrow company, the
title company, and all they have to do is scam you into their
numbered account.
Britain has payee matching. We need it, too. Several chairs
of the Fed have said they would work on it and still have not.
Chairman Barr. The gentleman's time has expired.
The gentleman from Georgia, Mr. Loudermilk, the vice chair
of the subcommittee, is now recognized.
Mr. Loudermilk. Thank you, Mr. Chair.
Before my remarks, I would like to submit this letter from
the American Securities Association into the record. The letter
stresses the importance of closer collaboration between
financial institutions and law enforcement to combat fraud and
scams. I would like to submit that for the record.
Chairman Barr. Without objection.
[The information referred to can be found in the appendix
on page 147.]
Mr. Loudermilk. Thank you, Mr. Chairman.
I would be amiss if I did not bring up something that this
committee has already done to help reduce fraud by removing the
noise of nonapplicable data when it comes to looking for
suspicious activities, and that was my Financial Thresholds
Modernization Act, which modernizes the CTR and SAR process to
reduce the burden on financial institutions so you can focus on
what is actually suspicious activity versus what you identify
as normal activity, and it reduces the proverbial haystack
within the government so we can actually find the needle.
So I encourage my colleagues on the other side to get on
board and help us move through the House this important piece
of legislation that I think will go a long way to help identify
fraud.
I have heard a lot about data sharing here today, and that
is extremely important when it comes to collaboration between
financial institutions and law enforcement and other entities,
especially when we live in a day and age that the amount of
data is unprecedented that is available and out there.
When I worked in IT and security and in intelligence, it
was not the thought of if the data was going to be hacked or
disclosed, it was when. The idea is to just make sure that your
data is more secure than the other data so they will go after
the other person and so I think we have to be extremely
vigilant.
Mr. McDade, how can we strike the right balance between
promoting necessary data sharing and avoiding excessive
centralization of sensitive information, which could actually
amplify the amount of sensitive data compromised in a breach?
Mr. McDade. Thank you for the question.
First, I would echo some of my colleagues saying a safe
harbor for banks to share this essential information.
When banks are interacting in the fraud space, we are on
the same team, and our fraud fighters are all working together
to try and stop a fraud or scam from happening.
If we are prevented due to the amalgam of privacy laws that
are being promulgated at the State level instead of the Federal
level, it really creates a difficult situation for us to be
able to communicate with each other.
Additionally, one of the recommendations I made in my brief
was to--and I believe Mr. Rust spoke to this as well--revise
the SAR policy so we have a fraud signal report and this would
not be something that is a lagging indicator, but as soon as we
are aware a fraud happened, have a concise way to get the
metadata associated with that fraud reported to law
enforcement.
If all the banks did that in the same fashion, they could
immediately cross-reference that essential data and see the
patterns and actually reach out and warn other banks that they
might have fraudulent accounts, or even go upstream to the
telecoms and social media accounts and let them know: We are
seeing fraud on this phone number, or on this account, please
take it down.
Mr. Loudermilk. Well, thank you.
One thing that I learned throughout my time in information
technology and security is you do not have to protect data that
you do not have and so only collect and hold that which you
actually need, which, again, goes back to the modernization of
CTRs and SARs.
What role can technology, such as anonymizing or otherwise
protecting sensitive data, play to help mitigate concerns over
information sharing?
Mr. McDade. I think it is essential to be able to anonymize
the data in a way that protects the consumers while still
giving the key data that is what we call in the industry fraud
signals.
These signals are pieces of information that if they are
shared across can show a pattern of fraudulent activity and
point back to the source where that fraudulent or scam activity
is coming from.
So while anonymizing our consumers' data is very important,
the IP address, MAC address, and some of the other data coming
from a fraudster's computer attacking our resources is
something that we should be able to share with law enforcement
at least, if not other banks.
Mr. Loudermilk. All right. Thank you.
I do not think I have time for my other question. So, Mr.
Chairman, I will deposit my remaining time and hope that maybe
I will earn interest for a future hearing.
Chairman Barr. So deposited.
The gentleman from Illinois, Mr. Casten, is now recognized
for 5 minutes.
Mr. Casten. We may have to apply a Howey test to that
deposit.
Thank you, Mr. Chairman.
Thanks to all the witnesses for being here.
I want to follow up on some questions that Dr. Foster
raised at the start about bitcoin ATMs.
The FBI has reported that Americans lost a third of a
billion dollars in crypt scams--crypto ATM scams--in 2025. That
was a 33 percent increase from the year before. The scams, as I
think many of us know, particularly target seniors.
I actually--this became personal--I got a call from a
constituent earlier this month whose brother had lost $190,000,
essentially all of their wealth, to one of these pig butchering
scams.
I do not know the details of theirs, but for people who are
watching, it is more or less as you described, Mr. Schuster. It
starts on a social media, maybe it is a dating app, maybe it is
your Facebook page. ``I want to be friends. I am really
attractive. You should talk to me. I have an investment plan.''
You build these relationships and then pretty soon you need
a little help to get out of a jam, or you have got an
investment opportunity. ``Please go to the local crypto ATM and
transfer me some money now that you trust me.''
It has really, I think, taken advantage of the fact that
social media is almost perfectly designed to make people
believe impossible things, and crypto ATMs are almost perfectly
designed to monetize that lie, because once you put it in
there, the transaction is immediate, it is irreversible, it can
use the ecology of the crypto system through mixers, through
chain hopping, through anonymous wallets to make it
untraceable.
The stories are painful. I do not know, Mrs. Dempsey and
Ms. McKune, I will let the two of you argue it out who wants to
take this. I am curious how your members are dealing with this,
because presumably they have to come to one of your banks to
withdraw real money in the first instance.
Any of you want to comment?
Mrs. Dempsey. Yes. Thank you for the question.
As I mentioned in my written testimony and today, it is
rampant. We deal with it on the front lines. Like I mentioned,
we have had multiple experiences where we have sat down with a
customer and we pulled up, we literally pulled up Facebook and
showed them the photo and they have told us, ``Oh, they told us
you were going to do that.''
We have shown them FBI reports. We do everything that we
can from our end when we identify those to stop it and to
inform them.
As I mentioned, they are changing every week. I know every
one of us could tell story after story of whether it is a pig
butchering, an investment, whether it is romance, whether it is
your child, your grandchild is in jail. All the things. We see
it every single day.
Mr. Casten. I do not want this to sound the wrong way; I am
sure you do that for good and ethical reasons. You also would
do that because you are bound by Know Your Customer rules,
right? So if they are going to withdraw the money, you need to
know something about who is the identity, what is the--all the
registration and reporting requirements.
Would you be supportive of rules that said let us apply
those same rules to crypto ATMs, make them go through the same
KYC rules so this is not all on you and your local bankers?
Mrs. Dempsey. Personally, yes, I think everyone should have
to know their customers because I think if you know your
customers, there is a lot of fraud that could be stopped at the
point of origination.
Mr. Casten. Okay.
I want to just point out that the Trump Administration has
made some positive noises about this, but everything that they
have done so far has been voluntary, and I think it is pretty
clear that the voluntary standards are not working.
We are seeing evidence that if one State has good rules and
the other State has bad rules, the scammers will say,`` Hey, do
not do this in Illinois, but drive across to Hammond, Indiana,
and maybe use the crypto ATM over there.''
So I would agree we need some policies, some Federal
policies.
Mr. McDade, if you will forgive me, I was looking on your
website before we got here and I saw that at EverBank you do
not allow people to do ATM withdrawals of more than $2,000 a
day; I think a bit more if it is a PIN-based transaction.
Is there any reason we should not employ those same
standards for crypto ATMs?
Mr. McDade. Every institution has their own risk tolerances
and sets those risk tolerances appropriately for their
institution.
In my view, it would be similar to what was just said as
far as the crypto ATMs. The difficulty is us being able to
inform our customers that they are sending money to the right
place and the right account, and the KYC rules assist with
that, so on the other end we can see that this is going to a
legitimate place.
Mr. Casten. Well, I will just close with one last story,
and I would welcome any of your input. We are trying to work on
some legislative fixes, and if you have good ideas, please
share them.
One of the smaller towns that I represent does not have a
super strong local economy. The mayor struggles to come up with
enough money to pave the roads and most of their tax revenue
comes from a very small set of convenience stores.
One of the convenience store owners, his primary source
of--his biggest source of revenue was a bitcoin ATM, and he
took it out in spite of its importance to that community
because he just kept watching seniors come in every day and
make deposits and then come back later and ask how to get it
out.
I do not know how the people who do that look at their kids
at the end of the day and say, ``You can be proud of what Dad
did today'' but as our former colleague, Elijah Cummings, was
fond of saying, ``We are better than this.''
Thank you. Yield back.
Chairman Barr. The gentleman from Pennsylvania, Chairman
Meuser, who has done a lot of great work on this issue, is now
recognized for 5 minutes.
Mr. Meuser. Thank you, Chairman, very much.
Thank you, certainly, to our witnesses.
The FTC reported $12.5 billion which was reported in fraud
losses last year. We, of course, know the real number is far
higher.
By the way, between 2021 and 2024, Congressional Budget
Office (CBO) reported scams and fraud were up 110 percent under
the CFPB's oversight. So doubling down on failure is pretty
much the last thing that we are going to do to solve this
crisis.
Fraud and scam roundtables have been held by our
committees, telecom companies have been invited in, tech
platforms, hosting tele-town halls with community banks,
working with us, with our U.S. Attorney General's Office, as
well as State Attorney General's offices.
We have been working at it since the beginning of this
Congress, and we are making progress, and we are as determined
to fight this crisis situation as you folks clearly are.
To Ms. McKune, I would like to start the questioning with
you. By the way, great testimony. I really appreciated what you
had to say.
From your experience, how effective is consumer education
in preventing scams before money ever leaves a customer's
account?
Ms. McKune. Thank you for the question.
We see this as an essential piece of how we are protecting
our consumers. We absolutely have to have educated consumers
because many times, as Mr. Rust has noted, there is so much
shame involved in admitting that you have been scammed. That is
one layer of the problem.
The other is that these are--they call it social
engineering for a reason. These are manipulations of people's
vulnerabilities and the things that they worry most about.
If we are in a position where they are not going to answer
our questions, they are not going to tell us what is happening,
the best tool we have, really, the very first tool has to be
fundamental understanding and sophistication in consumers about
the risks of fraud. It is why we are really supportive of an
all-of-government approach and a top-down consumer education
movement, because we do really see it as the essential first
step.
Mr. Meuser. So all of government, all of private sector are
very holistic, and that is definitely the strategic plan.
Mrs. Dempsey as well, great opening testimony. Thank you so
much.
When a customer walks into one of your branches after they
have been deceived online, what options do you and other
community banks realistically have to stop loss at that point?
Mrs. Dempsey. Well, if they have already sent it there is
not a lot that we can do at that point, if it has been outside
our bank and what we have done.
Ms. McKune as well, just education, the ongoing education
of trying to inform them before of when they are coming in to
get the money, of being bold enough--like I mentioned, we have
got really strong relationships with our customers, so we know
them. Our tellers do an incredible job of really just asking
questions--``What are you doing with this? Why do you need to
take this much out of the bank?''--and things of that nature.
I know we have talked, too, about just an overall approach.
So I want to highlight like with the ICBA, one thing we did
with the U.S. Postal Inspection Service was to come up with an
in-branch handout to give to consumers to educate them and to
start a conversation on fraud and scams. So hundreds of
thousands of those have been given out at almost a thousand
banks and so anything that we can do to bring attention to it
and to stop it before it happens.
Mr. Meuser. Thank you very much.
Mr. McDade as well, excellent testimony.
How important would it be if social media platforms were
required to verify advertisers and quickly remove scam ads once
they have been reported?
A number of you have referenced the SCAM Act. The SCAM Act
will certainly be requiring this of social media companies with
penalties that are appropriate.
Go ahead, please.
Mr. McDade. I would say it is essential. The reality is
these scams originate outside of our bank's control
environment, they, most of them--I believe there is a study out
of Britain that said 80 percent of the scams that they were
seeing in that country they alleged came from Meta as a
platform.
So when you take a look at that, we need to do something in
order to have correct accountability in those places.
Mr. Meuser. Okay. Excellent.
You know, I was in New York City, we visited BNY Mellon and
JPMorgan's fraud and scam prevention centers. They are spending
millions, if not, with a ``B,'' billions, on tracking and
preventing scams.
Do you believe telecom providers and social media platforms
are making the same level of investment to stop scams?
Mr. McDade. Unfortunately, they are not. While we do try to
partner as well as we can with the telecoms and the social
media, the reality is since they do not bear any of the
liability, they do not bear the responsibility as far as they
are concerned.
We have actually reached out to telecoms and asked them to
have a ``this is a scam email alert'' on the phone just like
you get ``this is spam.'' The truth of the matter is they are
regulated for spam, they are not regulated for scams, and so we
have not gotten the response that we need.
Mr. Meuser. Thank you.
I am almost out of time. Mr. Schuster, I had a question for
you on what else, regarding preventing scam calls and texts
from reaching consumers in the first place, but I am out of
time. Perhaps we can talk about that offline.
I yield back, Mr. Chair.
Chairman Barr. The gentleman from Massachusetts, Mr. Lynch,
is recognized.
Mr. Lynch. Thank you very much, Mr. Chairman.
First of all, I want to thank the panelists. You have all
been terrific and thank you for your work on this issue.
Honestly, I feel, though, that if this is Consumer
Protection Week, we should probably drape the Capitol in black
crepe because consumer protection is dead, it really is, based
on what has been happening here lately.
I honestly think that President Trump is ushering in the
golden age of fraud with all the actions that he has done.
Since January 2025--this is just his second term. We are
not going to touch the stuff in his first term--the Trump
Administration has undertaken unprecedented efforts to
undermine the Consumer Financial Protection Bureau through
systematic dismantling--the one agency that is charged with
protecting the consumer.
This is the one agency that Congress has identified and
structured to protect the consumer. Yet the administration
moved immediately to effectively shut down CFPB by declaring
its funding structure unconstitutional, unlawful, in November
2025, and it refused to seek additional funding from the
Federal Reserve, which just would have starved the agency.
On February 10, 2025, Acting Director Russell Vought issued
a stop-work order instructing all CFPB employees to stop
protecting American consumers and to not perform their work
tasks as the agency announced it would run out of money by
early 2026.
The administration also moved to terminate nearly all CFPB
staff. This is during the Department of Government Efficiency
(DOGE) scourge. They canceled--the administration canceled
about $100 million in employment contracts for those employees
whose job it was to protect consumers.
Although a Federal judge eventually ordered a pause of
those actions in February, many of those employees, who were
very valuable, very capable and qualified employees, were
placed on administrative leave and were unable to perform their
duties, and eventually many of them left because they felt they
had such uncertainty.
Remember, this is the agency that CFPB returned $19.7
billion from people who had scammed consumers, put that money
back in Americans' pockets, $5 billion, the amount of money
that CFPB had imposed on civil penalties on companies and
individuals that violate the law.
Especially, and this is key, we do a lot of work at Fort
Hood and some of these big bases, they recovered $363 million
in monetary relief resulting from 30 million public enforcement
actions that involved harm to servicemembers.
They are not being paid enough to begin with, and these are
a lot of young families that are barely making it; and also
veterans, including six enforcement actions for violation of
the Military Lending Act.
So that is what Trump is eliminating, that ability.
This is all--I am not even going to get into what the Trump
family themselves are doing. This is the same time--so the
Trump family launched Liberty Financial. This is Trump's sons,
all of them, also Zach Witkoff, who is Steve Witkoff's son.
They launched that at the same time that the Trump
Administration eliminated the crypto crimes enforcement unit.
So he goes into business in crypto, and then he eliminates
the crypto crimes enforcement unit. Tell me that is not
connected and he dropped enforcement on a ton of actions at the
SEC and the CFPB. He rolled back a bunch of rules curbing scams
at payday lenders. He delayed the implementation of the
fiduciary duty rule.
So he has done all of this to, as I say, to launch the
golden age of fraud, removing enforcement.
So, Mr. Rust, what do you think about our ability to
conduct current enforcement actions and guardrails in order to
protect consumers? Where do we stand right now given all that I
have said?
Mr. Rust. Well, it is true, it has been gutted, in so many
ways.
I think in the brief amount of time I want to highlight how
they are not helping servicemembers, which is one of the things
the Bureau has always done. There has not been a visit to a
military installation. There have been no monitoring reports to
prevent scams targeting servicemembers and veterans. No annual
report to understand priorities or complaint trends. The
dropping of the Navy Federal Credit Union enforcement action,
and the MoneyLion settlement pennies on the dollar. The most
recent Reduction in Force (RIF) plan would have left the Office
of Servicemember Affairs with no staff.
Mr. Lynch. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman Barr. The gentleman's time has expired.
The gentlewoman from California, Mrs. Kim, is now
recognized for 5 minutes.
Mrs. Kim. Thank you. Thank you, Chairman, for holding this
hearing and I want to thank our witnesses for joining us today.
You know, in California, we are in the golden age of fraud
with more types of fraud than Baskin-Robbins has flavors of ice
cream. Sadly, our Governor, Gavin Newsom, has done little to
stop this crisis.
That is why I introduced the No More SCAMS Act that would
create a Federal strike force dedicated to investigating fraud
involving Federal dollars, bringing fraudsters to justice, and
clawing back stolen taxpayer dollars for the American people.
I believe that we can learn a lot from the private sector
and the great tools that you have deployed to combat fraud and
scams to put the consumers first.
So I going to ask the first question to you Mr. McDade.
How do banks leverage third-party fraud tools to work
across financial institutions and prevent scams and fraud?
Mr. McDade. Thank you for the question.
Banks the size of EverBank, we are a mid-sized regional
bank, we do have a national presence, and we do have a presence
specifically in California.
When we look at it; we do not necessarily have the
resources to build our own AI constructs. We do not have the
data scientists, necessarily, to do that.
So we depend on groups like LexisNexis, Early Warning
Services (EWS), and other consortium-based tools to help us
find the fraud signals out in the environments that they touch,
report those signals to us so we can collaborate back and
forth, and risk rate transactions and risk rate potentially
fraudulent customers that are trying to break into the fraud
ecosystem, and they are essential partners for us.
Mrs. Kim. That is exactly why we need to do something
similar at the Federal level to streamline those efforts,
right?
Then there are third-party fraud fighters who are
successful because they can dialog with different financial
institutions and connect it from pieces of puzzle.
Similarly, the task force that I envision through this
legislation, the No More SCAMS Act, will be able to utilize the
resources of the different Federal agencies and combine both
the manpower and the information to track down those frauds.
Mr. McDade, how does improved coordination across agencies
can stop scams in the banking system?
Mr. McDade. So we are calling for a national task force on
fraud, and we think that one of the things we need is alignment
across all the different agencies and all the different law
enforcement entities.
The reality is, as I talked about in my testimony, when a
fraud report is made by a consumer there is not necessarily a
specific agency that they can point to pick it up because
different agencies have different mandates, and then you have
the local law enforcement.
I would say something to be done in that direction would be
the GUARD Act that is being talked about, which is similar to
the High Intensity Drug Trafficking Areas (HIDTA) program that
I worked with as a prosecutor where we allow the Federal
resources to partner with the State resources for these $20,000
to $50,000 scams that are hitting our banks that do not rise to
the level of Federal prosecution, but are multi-jurisdictional,
and so there is a difficulty with law enforcement approaching
them.
Mrs. Kim. Thank you. Thank you.
You know, one type of financial fraud that I particularly
focus on is the credit repair scams. I serve as the co-chair of
the Financial Literacy and Wealth Creation Caucus, and I have
seen the damage of those scams on consumers who are exploited
by false promises involving their credit scores.
To that end, I am co-leading the Ending Scam Credit Repair
Act to help end those types of scams and prevent bad actors
from stealing money from hardworking American families.
So, Mr. Chairman, I would like to ask for unanimous consent
to submit this letter that I got from the American Financial
Services Association emphasizing the need to end--the need for
this type of legislation.
Chairman Barr. Without objection.
[The information referred to can be found in the appendix
on page 150.]
Mrs. Kim. I also have another letter from SIFMA to also----
Chairman Barr. Without objection.
[The information referred to can be found in the appendix
on page 152.]
Mrs. Kim. Thank you very much.
Let me shift gears now. I want to also focus on romance
scams and the work that is being done to cracking down on them.
I was proud to lead the effort to have the Treasury
Department identify romance scam facilitators in Cambodia as
money laundering entities. While that was a great step in the
right direction to crack down on bad actors, we must also focus
on ways to prevent those scams at the point of attack as well.
So, Ms. McKune, how are credit unions like Park Community
using methods such as consumer education to prevent romance
scams before--before--the money gets taken?
Ms. McKune. This is part of our broad consumer education
efforts. We are aware that romance scams are a problem.
Not to make light in any way of the ways our members are
victimized, but Keanu Reeves might need to come before the
committee. Keanu Reeves is someone who gets pulled out as
people posing as Mr. Reeves, and we have had multiple members
who believed that they were in a relationship with Mr. Reeves.
We know about them, we try to educate our members, and we
move as quickly as we can when we see the signs of those.
Chairman Barr. The gentlelady's time has expired.
The gentleman from Texas, Mr. Green, is now recognized.
Mr. Green. Thank you, Mr. Chairman.
Mr. Chairman, the better name or better title for this
hearing would be ``Fighting Fraud on the Front Lines:
Challenges and Opportunities for Trump and the Trump
Administration to Engage in Corruption.''
Let me start by asking unanimous consent that certain
articles be introduced into the record.
The first is styled ``Melania Trump's meme coin architects
accused of pump-and-dump fraud in lawsuit.''
The second one is styled ``Trump meme coin down 96% as
Bitcoin and meme coins slide,'' and I have a third. The third
one has to do with Kristi Noem. ``Firm Tied to Kristi Noem
Secretly Got Money From $220 Million DHS Ad Contracts.''
Allow me to go through these articles very quickly. I think
they paint a picture of corruption.
The first is in The Guardian, the one styled--did I get
unanimous consent, Mr. Chair, to introduce my articles? Mr.
Chairman? Mr. Chairman?
Chairman Barr. Without objection.
[The information referred to can be found in the appendix
on pages 155-168.]
Mr. Green. Thank you.
The article from The Guardian styled ``Melania Trump's meme
coin architects accused of pump-and-dump fraud in lawsuit,''
reading it in various portions we find the language: The
$MELANIA coins were released for just a few cents each on 19
January, the day before Donald Trump was inaugurated. I am
paraphrasing, and then it goes on to say: Within hours, this
coin's price soared to $13.73.
Then it goes on to read: However, it then collapsed almost
as quickly and is now worth about 10 cents, less than 1 percent
of its peak price. It goes on to add that at its peak it was
worth $45.47. It goes down to $5.79.
The article goes on to indicate: The Trump family has
pocketed more than $1 billion--more than $1 billion--in pretax
profits from several cryptocurrency-related products over the
past 12 months.
Then we have the second one, ``Trump meme coin down 96
percent as Bitcoin and meme coins slide.'' Reading in part from
the article: ``Last February, the coin's market capitalization
stood at $3.5 billion, already well below its $14.5 billion
peak on the eve of his second inauguration. Today, it has
fallen to $1.78 billion.''
Then it reads, in part, that the scale--they are talking
about a pump-and-dump scheme here, it talks about the scale of
this pump-and-dump scheme involving at least 15
cryptocurrencies, included the $MELANIA currency. It indicates
that, of course, the coin is down 96 percent in this scam.
Now, let us move over to Secretary Noem. Secretary Noem,
the article is styled: ``Firm Tied to Kristi Noem Secretly Got
Money From $220 Million DHS Ad Contracts.'' $143 million has
gone to a mysterious LLC Delaware company created just days
before it was awarded a deal.
The corruption that this administration has imposed upon
the public, pocketing big money from pump-and-dump schemes, is
unbelievable. When you read it, it is almost like reading a
corruption story in some magazine.
I am going to yield back the balance of my time, Mr.
Chairman, but I think that these things have to be further
investigated.
Chairman Barr. The gentleman's time has expired.
The gentleman from South Carolina, Mr. Timmons, is now
recognized.
Mr. Timmons. Thank you, Mr. Chairman and thank you to the
witnesses for being with us today.
Financial fraud and scams are becoming one of the fastest-
growing financial crimes facing Americans. Increasingly, these
schemes are carried out by large-scale criminal networks
operating overseas, often using sophisticated technology,
coordinated infrastructure, and social engineering tactics that
target Americans at scale.
As these operations evolve, financial institutions are
often the first line of defense. Banks and credit unions are
responsible for detecting suspicious activity, protecting their
customers, and coordinating with law enforcement.
As fraud networks grow more complex and increasingly
operate across borders, it raises serious questions about
whether our current legal and regulatory frameworks are fully
equipped to support the institutions working to stop these
crimes.
Mr. McDade, in your testimony you noted that the FBI
received more than 850,000 IC3 complaints involving over $16
billion in losses last year alone.
Based on your experience, both in the banking sector and as
a former prosecutor handling complex fraud cases, would you
agree that a significant portion of these modern scams are
being conducted by large organized criminal operations
operating in foreign jurisdictions?
Mr. McDade. Yes. The evidence is very clear that is
happening. We get phone spoofs that are coming from overseas
phones. Our bank is a primary digital bank, and we are able to
often detect whether or not things are coming from overseas,
and a large number of the fraud accounts that we see attempting
to be open are from overseas.
There has been some very strong media coverage about that,
The New York Times and The Economist showing scam compounds as
massive, organized crimes larger than, in some cases, the drug
trade in Southeast Asia and Africa.
Mr. Timmons. Thank you for that.
How do these operations differ from the more traditional
fraud schemes we saw a decade or two ago?
Mr. McDade. Well, the reality is they are able to leverage
at scale some of the techniques that used to be done piecemeal.
They are gathering data from data breaches, they are gathering
data from, as I said earlier, publicly available resources,
such as the PPP lending site, and they are cross-referencing
those, we believe, using artificial intelligence and machine
learning, in order to create profiles that they are able to
know a great deal about the individual customers they are
approaching and take a focused effort with knowledge of how
that customer normally transacts in order to fool them into
believing that they are a trusted source as they approach them.
Mr. Timmons. So technology is largely to blame for the more
sophisticated version of scams and frauds?
Mr. McDade. The scammers and fraudsters are using
technology at scale is what we are observing.
Mr. Timmons. Is it fair to say that 20, 30 years ago, if
you were to engage in this, it is going to be on a small scale,
and you are going to have a higher propensity of getting caught
by law enforcement?
Mr. McDade. I would say that it is much easier for them to
avoid law enforcement because they can have anonymity online as
they are doing this work.
Mr. Timmons. Well, it is not that they have anonymity. It
is that we do not have the jurisdiction to pursue criminal
charges and hold them accountable. Is that fair?
Mr. McDade. That is fair to say. When they are
multinational, it is much more difficult to have prosecution.
Mr. Timmons. We can use the resources that we have to
address attribution. It is not easy, but we have the ability to
figure out who is engaging in certain scams. Is that correct?
Mr. McDade. At times it is possible that we can point to
specific areas and specific individuals overseas.
Mr. Timmons. Do you know of any other area of crime that
the U.S. Government just does not enforce? I mean, we have the
ability to hold these people accountable in foreign
jurisdictions, we just do not do it.
I mean, is that fair to say? I mean, we could figure out
who is engaging in $16 billion worth of fraud, and we could
hold them accountable, but we choose not to.
Mr. McDade. I cannot really speak to the specific efforts
that are happening there, but I would agree that everybody
agrees that more attention to fraud and scams in a more
significant approach is absolutely necessary.
Mr. Timmons. Obviously education to make Americans protect
themselves better is huge. I mean, everyone is susceptible to a
certain degree. I just feel like the Federal policies should
address that and should say, if you are engaging in organized
crime, we are going to attempt to arrest you. If you are in a
nonextradition country, we are going to use other tools in our
toolbox.
The President's favorite word is tariffs, and he could say:
All right, we are going to make the victims whole, and then we
are going to impose tariffs to recoup our losses, or you can
just give us the person that committed the crime.
I mean, so we do have the ability to hold these people
accountable and to make the victims whole, but we choose not to
do that. I mean, we could hold organized crime accountable in
Eastern Europe and Southeast Asia, but we choose not to. Is
that fair?
Mr. McDade. I would just say that banks would welcome any
resources the Federal Government wanted to bring to bear to
help stop this epidemic of fraud and scams.
Mr. Timmons. Well, I could not agree--we need to get our
act together.
I appreciate you all being here today.
With that, I yield back.
Mr. McDade. Thank you.
Chairman Barr. The gentleman yields.
The gentleman from Wisconsin, Mr. Fitzgerald, is
recognized.
Mr. Fitzgerald. Thank you, Chairman.
Thank you for being here today. I know it has been a couple
hours, so I appreciate that.
So I was at a bank in my district last week, a prominent
bank in southeastern Wisconsin, and we had a very good
discussion with staff at that bank about fraud and then we had
credit unions this week in DC. So I talked to a number of
people about it.
I do not think this topic came up. Maybe it did. Maybe it
touched on it this morning. I have got Judiciary going on as
well but in both of those instances there was a component of
this which is related to family members that actually are part
of the fraud, or sometimes bilking, for the most part the
targets are adults, and it is another family member is having a
discussion about one of their accounts. It is not until kind of
the front line, which is oftentimes the person working at the
credit union or the bank that is in a teller position, that
kind of realizes something is not right.
So I was just wondering if I could just get a thought on
the family aspect of this, and certainly law enforcement. I
mean, they do not want to get involved in any of these fraud-
related scams that are nationwide, but when it includes a
family member it is even more hands-off, is what I am being
told. I am wondering if you believe that is the case.
Mrs. Dempsey?
Mrs. Dempsey. Not in our community and that falls, for us,
it sounds like, more under Adult Protective Services when we
see family members that are taking advantage of an elderly
grandparent or aunt or uncle or things of that nature. I am not
sure if that is what you are implying.
Mr. Fitzgerald. Yes. That is what the discussion is about.
Mrs. Dempsey. Yes, or a caregiver that has gotten control
as an authorized signer on their account or something of that
nature.
So for us in Tennessee we have also got very good laws to
help us with elder abuse and prevention and protection. So we
have a good relationship with our law enforcement and Adult
Protective Services when we recognize that and see it
happening.
Mr. Fitzgerald. Very good.
Mr. McDade?
Mr. McDade. I would echo the fact that we would approach
adult and family services within our eldercare program when we
do detect something that could indicate someone is being taken
advantage of by somebody close to them.
There are processes to do that. It is usually through the
State's Attorney General's Office in the various States that we
do business in, and we regularly make those reach-outs when it
is appropriate.
Mr. Fitzgerald. Very good.
Ms. McKune?
Ms. McKune. I want to note that one of the things that I
think can give law enforcement some trepidation is how very
complex these situations are.
They rely heavily on us to try to unwind and figure out
what is going on. We lean into our tellers in our branches when
they have good relationships and know some of the dynamics, but
it is unquestionably true that vulnerable folks are vulnerable,
and that can be family members, that can be people they have
designated as powers of attorney, et cetera.
So we do as much as we can to package the information to
say this is why we believe this is what is going on.
Mr. Fitzgerald. Very good.
Mr. Schuster?
Mr. Schuster. Thank you.
It is a great question. I think you are hearing that
financial institutions are doing a lot to identify these
frauds. They are many times, on the front lines, identifying
where there are family fraud, potential elder abuse, and
reporting that, and that helps.
This is not something that the CFPB is doing. This is
financial institutions themselves and having laws that restrict
their ability to stop these types of things are where there are
impediments to continuing to help consumers.
Mr. Fitzgerald. Very good.
Mr. Rust, I do not know if you have a comment on that
topic.
Mr. Rust. I agree with much of what has been said, but I
also want to emphasize the size of reporting. If the amount is
only $2,000 or $3,000, which is still plenty, that needs to be
routed up to law enforcement.
I think a whole-of-government approach to public
infrastructure surrounding complaints. People should not have
to know which agency they should complain to. That information
should be, if it ends up in the wrong agency, shared with the
correct agency with the kind of customer service relationship
work that the Bureau has always shown.
Mr. Fitzgerald. Very good.
Thank you so much. I yield back, Chairman.
Chairman Barr. The gentleman yields back.
I would like to thank all of our witnesses for their
testimony today. We have come to the end of this hearing.
Without objection, all members will have 5 legislative days
to submit additional written questions for the witnesses to the
chair. The questions will be forwarded to the witnesses for
their response.
Witnesses, if you could please respond no later than April
9 if you do get such written questions.
[The information referred to can be found in the appendix.]
Again, I want to thank all of our witnesses for your
excellent testimony and contributions. I think we heard a lot
of good recommendations here to deal with this multi-billion-
dollar problem for the American people and hopefully we can
make progress. Thanks for all the great work that you all do
protecting your customers and the American people.
This hearing is now adjourned.
[Whereupon, at 12:02 p.m., the subcommittee was adjourned.]
APPENDIX
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