NAFCU President and CEO Dan Berger recently forwarded correspondence to the Consumer Financial Protection Bureau (CFPB), opposing the potential expansion of CFPB Regulation E liability.
Regulation E, in its present state, most recently amended on July 21, 2020, protects consumers when they use electronic fund and remittance transfers.
Berger cited reports suggesting the CFPB may expand liability under Regulation E to encompass fraudulently induced transfers initiated by a consumer.
“Credit unions are committed to providing safe, affordable, and fast payments to all their members while also ensuring compliance with Regulation E,” Berger wrote in the letter to CFPB Director Rohit Chopra. “However, such a commitment depends on a fair and stable regulatory environment where the plain language of the EFTA does not expand beyond what was originally envisioned by Congress. Further expansion of credit union liability under new guidance would magnify this risk beyond reasonable limits and have far-reaching consequences.”
Berger recommended that, instead of issuing new interpretations of Regulation E, the CFPB should redirect its focus to investigating technologies and solutions that aid in preventing fraud from the onset.
“Technical and educational resources would also ensure that efforts to support real-time payments, such as FedNow, are not abandoned out of fear that financial institution liability under Regulation E liability might exceed manageable limits,” Berger wrote.