Bankers seek regulatory changes to reduce
check forgery
ARLINGTON, Va., Aug. 6, 2024
/PRNewswire/ -- Despite the decline in check volume, 90%
of U.S. banks surveyed said check fraud is
ballooning, according to a new survey released today by fintech
IntraFi.
The survey, which included responses from 471 banks, found that
more than a quarter of banks experienced a 50% or higher increase
in check fraud over the past three years. Another 19%
said check fraud was up 30-49%, while an additional
28% said it rose by 10-29%.
"Those are staggering numbers that show check fraud
is rampant and surging," said Mark
Jacobsen, IntraFi's CEO and cofounder. "Community banks are
being hit particularly hard, and they are looking to policymakers
to step in."
Indeed, community banks appear increasingly frustrated by
repayment delays on bad checks from the institutions that cashed
them. Ninety percent of respondents said such delays are either a
regular occurrence or occur occasionally. The largest bottleneck in
the repayment process is at institutions with more than
$700 billion of assets, according to
59% of respondents.
When asked what changes they would like to see from regulators,
62% said they support shifting liability for check
fraud to the "bank of first deposit," the institution
that first cashes the bad check. Nearly half of bankers want law
enforcement to better target check fraud, while 14%
support more funding to expand the U.S. Postal Service police
force.
Outside analysts agree the issue needs to be addressed.
"In the last couple years, you cannot believe all the emails and
calls I get concerning check forgery," Frank Abagnale Jr., founder of Abagnale and
Associates, and the inspiration for the book and film "Catch Me If
You Can," said on a recent episode of IntraFi's Banking
with Interest podcast. "It's a huge problem."
The IntraFi survey also found that bankers continue to be
pessimistic about the economy. Thirty-four percent cited worsening
economic conditions at their institution over the past year, while
38% said they expect conditions to worsen over the next 12
months.
Elevated funding costs and fierce competition for deposits may
be fueling that pessimism. Eighty-three percent of bankers surveyed
said the price of funds had risen over the past year, with 59%
citing a more competitive environment for deposits.
Bankers were split when it comes to loan demand, with 39% saying
it had risen over the past year while the same percentage said it
had fallen. Looking to the future, 42% expect loan demand to rise
while 35% expect it to stay the same.
IntraFi's Q2 2024 Bank Executive Business Outlook Survey
garnered responses from CEOs, presidents, CFOs, and COOs
at 471 unique banks across the country. Download
the full report.
About IntraFi
A trusted partner chosen by more than 3,000 financial services
companies, we define success not by the volume of transactions we
enable, but by the quality of relationships we form. Our network,
established over 20 years ago, connects institutions of all sizes
to help participants build stronger relationships with their
customers, fund more loans, seamlessly manage their liquidity
needs, and earn fee income. The network brings scale, giving each
participant access to tens of billions of dollars in funding, the
highest per-depositor and per-bank capacity, and the peace of mind
of being able to make large-dollar placements.
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SOURCE IntraFi