Defense Credit Union Council opposes expansion of EFTA in new legislation
WASHINGTON, DC (August 20, 2024) — Today, the Defense Credit Union Council, (DCUC), sent a letter addressed to Senators Richard Blumenthal and Elizabeth Warren, and Representative Maxine Waters expressing its opposition to S. 4943, the “Protecting Consumers from Payment Scams Act.” This legislation proposes to expand the scope of the Electronic Fund Transfer Act (EFTA).
DCUC voiced significant concerns about the potential impacts of the proposed changes. In its letter, DCUC highlights the expansion of EFTA could hinder credit unions’ ability to offer innovative payment solutions, which are crucial for competing with larger financial institutions and meeting the needs of service members and their families.
DCUC emphasized that its members are committed to consumer protection and fraud prevention, investing in advanced security technologies. However, the Council warned that extending liability under EFTA for fraudulently induced transfers could create financial challenges for smaller credit unions and may not effectively address the complex nature of modern scams. Instead of enhancing protection, the legislation may inadvertently increase consumer risk by failing to address the sophisticated methods employed by fraudsters.
“DCUC’s members continuously invest in payment security and fraud mitigation technologies to shield their members from fraud and scams. However, our members’ capacity to absorb losses for authorized payments is limited. DCUC member institutions are significantly smaller and particularly sensitive to new regulatory expectations that modify liability under the EFTA and Regulation E. Moreover, a substantial portion of scams originate outside of the financial sector, with criminals targeting online marketplaces, cryptocurrency investments, and other forms of non-regulated sectors —all areas beyond our control. Therefore, the legislative proposal to extend liability under EFTA to include fraudulently induced transfers initiated by consumers is alarming to our members.” – Jason Stverak, DCUC Chief Advocacy Officer
DCUC concluded its letter advocating for a more comprehensive approach to combating fraud and called for the proposal a private-public sector task force under the Treasury Department to improve scam prevention through collaboration and innovative strategies.
For more information, please contact Jason Stverak, DCUC Chief Advocacy Officer, at jstverak@dcuc.org. To learn more about DCUC 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.
