In a recent blog post, the Consumer Financial Protection Bureau (CFPB) indicated it has filed an amicus brief in a lawsuit brought against Citibank by the New York State Attorney General’s Office (NYAG) for allegedly failing to protect and reimburse victims of wire fraud.
In January 2024, the NYAG filed a federal lawsuit against Citibank, alleging violations related to Citibank’s online and mobile wire transfers. The lawsuit claims Citibank did not implement strong data security and anti-breach practices, failed to respond appropriately to customers’ claims of wire-transfer fraud, and did not adequately inform customers about their rights after their accounts were hacked and funds stolen.
Additionally, the NYAG alleged that Citibank illegally denied reimbursement to fraud victims in accordance with Regulation E, which implements the Electronic Fund Transfer Act.
Citibank has argued that the Electronic Fund Transfer Act does not apply because the scammers ultimately used a wire transfer, and the Act contains an exemption for transfers made by banks “by means of” a wire service.
The CFPB disagrees with Citibank’s stance. In its statement of intent filed with the court, the CFPB argues that when a “bank connects wire transfer capabilities to its online consumer banking platform and a person authorizes (or a scammer purports to authorize) a transfer online, the Electronic Fund Transfer Act applies to the transaction except for the bank-to-bank portion of it.”
Read the CFPB’s statement of intent.
Read America’s Credit Unions’ (ACU) blog post.
Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:
Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!
Additionally, other League-member compliance resources include:
For more information, email Lisa Quaranta.
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