ICBA shared Uniform Commercial Code updates that would allocate losses, establish standards of conduct between banks, and substantially improve community banks’ ability to mitigate payments fraud.
Details: In a letter to the Joint Study Committee on UCC Articles 3, 4, and 4A, ICBA—the only banking association to respond—recommended:
- Updating the definitions of counterfeit item and warranty.
- Uniform standards of conduct for interbank warranty claims.
- Ordinary care for image and mobile deposit channels.
- Warranty parity for official checks.
- Addressing the issue of beneficiary name mismatches.
- Establishing clear responsibilities for instances of account takeover and recovery.
- A safe harbor for protective action taken in good faith.
- Greater coordination with federal law.
Background: The Uniform Law Commission and the American Law Institute recently kicked off the Joint Study Committee to review whether the check fraud and wire fraud provisions need to be changed, with ICBA participating in the meetings.
More: In a recent blog post, ICBA Senior Vice President of Strategic Initiatives and Policy Scott Anchin discussed how community banker advocacy has contributed to a rising push to address check fraud.
ICBA Fraud Efforts: While the fight against fraud is ongoing, ICBA is making headway by:
- Partnering with the U.S. Postal Inspection Service and working with the U.S. Postal Service.
- Creating practical fraud prevention resources for community bankers, including a guide on escalating concerns to regulators.
- Starting a Fraud and Scams Task Force that has matured into a venue for peer intelligence and best-practice sharing.
- Hosting a fraud discussion group on ICBA Community for more than 1,500 community bankers.