ABA, BPI, CBA and TCH Statement on Sen. Warren’s Zelle Report

Washington, D.C. — The following statement was issued by the American Bankers Association, Bank Policy Institute, Consumer Bankers Association and The Clearing House in response to the report Senator Elizabeth Warren (D-Mass.) released on Zelle fraud earlier today:

“Today’s report from Sen. Warren fails to acknowledge that 99.9% of the 5 billion transactions processed on the Zelle network in the past 5 years were sent without any report of fraud or scams. Zelle has soared in popularity with bank customers because it’s fast, free and easy to use. Customers also take comfort in knowing that Zelle transactions are provided by and through their trusted bank.

“That doesn’t mean that Zelle, just like every other instant P2P payment service, is entirely free from those who seek to defraud the American consumer. Banks know this and take steps to mitigate instances of fraud and criminal activity. For example, banks routinely warn customers not to send money to people they don’t know, often using innovative technology to urge their customers to show caution. In addition, and contrary to Sen. Warren’s report, banks are obligated under federal law to investigate every instance in which a customer disputes a transaction made via Zelle and provide reimbursement if the transaction was unauthorized, an obligation banks take seriously to ensure protection for their customers.

“Expanding the current liability framework for banks, as the report suggests, would force Zelle providers to either scale back Zelle’s popular instant P2P services given the financial risk, possibly limit the instantaneous features or impose fees to recover their additional costs. Either way, consumers’ access to these valued services would be limited, forcing them to meet their needs outside the well-regulated banking system. Further, a change in the current framework would have a chilling and disproportionate impact on community banks, and all small financial institutions, and some would be unable to offer P2P payment services altogether given the potential for unlimited liability. Moreover, Senator Warren’s report fails to address consumer fraud on nonbank P2P providers, like Venmo, PayPal and Cash App, where a recent BPI survey showed the prevalence of fraud to be much greater than on the Zelle network, on a proportionate basis.

“The report issued today offers no constructive solutions to better prevent and crack down on fraud. We urge policymakers and law enforcement to join with the payments industry in focusing on steps to prevent bad actors from scamming customers out of their money and educating consumers on how to use these services safely. Let’s stop the criminals rather than create policies that risk diminishing the value and benefits of this increasingly popular and indispensable service.”


About Bank Policy Institute.

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

About the American Bankers Association.

The American Bankers Association is the voice of the nation’s $23.7 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard nearly $19.6 trillion in deposits and extend $11.8 trillion in loans.

About the Consumer Bankers Association.

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.

About The Clearing House.

The Clearing House operates U.S.-based payments networks that clear and settle more than $2 trillion each day through wire, ACH, check image, and real-time payments. It is the nation’s most experienced payments company, with a long track record of providing secure and reliable systems, payments innovation, and strategic thought leadership to financial institutions. In 2017, The Clearing House revolutionized U.S. payments by introducing the RTP® network, which supports the immediate clearing and settlement of payments, along with the ability to exchange related payment information across the same secure channel. These RTP capabilities enable all financial institutions to offer safer, faster, and smarter digital transaction services for their corporate and retail customers. Learn more at www.theclearinghouse.org.

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