Proposed S.3898 Amendment to the Electronic Fund Transfer Act Would Shift Risk of Loss to Banks
Richard L. Santalesa writes:
Just a step below widows and orphans on the sympathy scale, at least when it comes to ripoffs and theft, sit school districts, boards and local municipalities. And in a era of tight budgets, when school districts are robbed of tax monies from halfway around the world via ACH/wire fraud, state and federal politicians take notice. After the Duanesburg Central School District in upstate New York, a district with 1,000 students and an annual budget of approximately $15 million, suffered a brazen cybertheft of $3 million in December 2009, which eventually left the school district potentially on the hook for over $400K of un-recovered funds (details about the Duanesburg cybertheft here and here and here), the District approached State officials on the issue (here) and then federal representatives, including Senator Schumer.[…]
Boiled down, S.3898 essentially modifies FDIC Regulation E implementing portions of the EFTA to extend the $50 limitation of loss from ACH/wire fraud currently covering individual consumers to school districts and municipalities. Notably in a Senate still dominated by 57 democrats, Senator Schumer stands as S.3898’s sole sponsor headed into a lame-duck session of Congress that is likely to see the House, and possibly the Senate, change hands.
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