DCUC sends letter ahead of permanent subcommittee on investigations hearing, “Instant Payments, Instant Losses: Zelle and the big banks fail to protect consumers from fraud”
WASHINGTON, D.C. (July 22, 2024) — Today, the Defense Credit Union Council (DCUC) sent a letter to The Honorable Richard Blumenthal, Chairman, and The Honorable Ron Johnson, Ranking Member, Committee on Homeland Security & Governmental Affairs Permanent Subcommittee on Investigations, United States Senate. In its letter, DCUC provided its commentary ahead of the committee hearing titled “Instant Payments, Instant Losses: Zelle and the Big Banks Fail to Protect Consumers from Fraud.”
DCUC noted how many credit unions and their members use Zelle, a cutting-edge digital peer-to-peer (P2P) payment network, for its ability to send and receive money through an optimized secure network, with over 99.9% of Zelle transactions completed without a report of fraud or scam.
DCUC further emphasized how Zelle is an especially crucial resource for servicemembers and their families, stating “…it enables them to transfer funds directly from their credit union to individuals at other financial institutions, a necessity given their frequent deployments and inability to meet face-to-face.”
Jason Stverak, DCUC Chief Advocacy Officer, added, “Credit unions offering Zelle send alerts and reminders before payments are finalized, helping to prevent scams. This includes validating the recipient’s first name and notifying the sender that the payment is irrevocable. Zelle and its participating financial institutions, including our member credit unions, are dedicated to making Zelle the safest P2P service available to our servicemembers through a multi-layered approach that identifies, intercepts, and removes bad actors.”
DCUC concluded its letter by sharing that while scams are not unique to Zelle and affect all payment forms, it believes policymakers should focus on partnering with industry stakeholders and collaboratively enacting effective solutions for identifying and preventing scams.
“This approach will help preserve consumer confidence in the financial system while allowing innovative and fully regulated payment solutions to continue to be part of the financial ecosystem.”
For questions or comments, please contact Jason Stverak, DCUC Chief Advocacy Officer (CAO) at jstverak@dcuc.org. To learn more about DCUC’s advocacy, visit dcuc.org/advocacy.
About Defense Credit Union Council (DCUC)
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 37 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
