Regulators want to help FIs fend off fraudsters

Fraud is rampant in the financial services space. The Federal Trade Commission, for example, reported that non-card fraud rose 271 percent between 2020 and 2024. Data collected by the Financial Crimes Enforcement Network (FinCEN) revealed that the number of Suspicious Activity Reports (SARs) filed related to check, ACH and wire fraud increased 489 percent between 2014 and 2024.

"The rise in check fraud is particularly notable," the regulators wrote in a recent request for information (RIF)—especially given the decline in check usage.

A report compiled by Citizens Financial Group, a bank holding company headquartered in Providence, R.I., suggests that while fraud is a concern for most businesses, smaller businesses suffer much more than their larger competitors.

Public input wanted

Now comes news that the leading federal financial regulatory agencies are interested in exploring ways they can help financial institutions mitigate the risk of payments fraud. An RIF issued by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corp. seeks public input on a series of questions related to fraud and potential actions that can be taken to address payments fraud.

"Payments fraud inflicts significant harm on consumers, businesses and financial institutions," the RIF stated "Payments fraud also has the potential to erode public trust in – and undermine the safety, accessibility, and efficiency of – the nation's payment system, upon which the U.S. financial system depends."

Regulators noted that they have overlapping yet discreet roles and authorities related to issues involving payment fraud. For example, all supervise FIs, yet the FDIC has the distinct mission of maintaining public confidence in the financial system, and the Fed has numerous roles, including operating payment systems, like the ACH and FedNow.

The regulators said future steps addressing fraud might take the form of collective action, such as joint supervisory guidance, or independent actions, such as changes to the payment systems operated by the Fed.

What they want to know

"Given the complexity and scope of payments fraud, input and engagement from a variety of stakeholders will be helpful to identify and evaluate the range of potential actions to consider," the RFI stated.

It identifies five potential areas that might warrant improvement and collaboration to help mitigate payments fraud. And for each of those areas, they pose a series of questions numbering between two and seven.

The five sets of questions address:

1. External collaboration;
2. Consumer, business and industry education;
3. Regulation and supervision;
4. Payments fraud data collection and information sharing; and
5. Federal Reserve Bank operator tools and services.

Answers to the questions are requested by Sept. 18, 2025. FIs should submit answers to questions to their primary regulator. Non-FIs can submit answers to the Board of Governors of the Federal Reserve System.

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