WASHINGTON — With credit unions meeting here this week its Congressional Caucus, America’s Credit Unions is urging House leaders to approve two bills aimed at strengthening law enforcement efforts against financial fraud and establishing national rules for rounding cash transactions as the nation phases out production of the penny.
According to America’s Credit Unoins, more than 500 people are expected to be in attendance at the annual Caucus event, which will include Hike the Hill events as both the House and Senate are in session.
In a Sept. 11 letter to House Speaker Mike Johnson and Minority Leader Hakeem Jeffries, the trade group backed H.R. 2978, the Guarding Unprotected Aging Retirees from Deception, or GUARD, Act, and H.R. 10167, the Common Cents Act.
America’s Credit Unions said both measures are scheduled for House consideration and urged lawmakers to support them.
The organization represents credit unions serving more than 146 million members nationwide.
GUARD Act Targets Financial Fraud
The GUARD Act would allow state and local law enforcement agencies to use funding from existing federal law enforcement grants to combat financial fraud.
The funding could be used to hire and train personnel, acquire analytical and technology tools and improve agencies’ ability to investigate increasingly sophisticated scams.
The legislation also calls for additional federal reporting on financial fraud trends to give policymakers and law enforcement agencies more information about the scope and nature of the problem.
The House Financial Services Committee unanimously approved the legislation 52-0 in May.
‘Particularly Vulnerable’
America’s Credit Unions said older consumers can be particularly vulnerable to financial fraud because criminals frequently target retirement assets, accumulated savings and other financial resources.
The group cited the growing use of impersonation, romance, investment and technology-enabled scams designed to gain victims’ trust and persuade them to transfer money.
Credit unions are frequently on the front lines in identifying suspicious transactions and assisting members who have been targeted, the trade group said, but financial institutions cannot combat sophisticated fraud networks on their own.
The GUARD Act would provide additional resources, training and technology to state and local law enforcement and could improve coordination between investigators and financial institutions, America’s Credit Unions said.
National Standard Sought for Penny Rounding
America’s Credit Unions also endorsed updated bipartisan language in the Common Cents Act, which seeks to address problems resulting from the end of penny production and declining inventories at Federal Reserve coin distribution sites.
The association said the lack of a national rounding standard has created uncertainty and operational problems for credit unions and other financial institutions.
Under the legislation, cash transactions ending in 1, 2, 6 or 7 cents could be rounded down to the nearest nickel, while transactions ending in 3, 4, 8 or 9 cents could be rounded up.
Electronic transactions, including those involving cards, checks and electronic funds transfers, would not be rounded and would continue to be processed for the exact amount.
Employers choosing to round cash wage payments would be required to round upward, although the legislation would not require employers to use rounding.
America’s Credit Unions said the approach could reduce disruptions caused by coin shortages, lower cash-handling costs for businesses and simplify transactions while preserving consumers’ ability to pay with cash.
Clarity Sought on Interim Practices
The Common Cents Act also seeks to establish a consistent federal standard while recognizing state and Tribal authority in areas not specifically covered by the legislation.
America’s Credit Unions said uniformity is particularly important for credit unions and merchants operating across multiple jurisdictions.
The trade group also called on the Federal Reserve to work with the National Credit Union Administration and other federal banking regulators to provide guidance on acceptable rounding practices while a national standard is being implemented.
Among the issues it wants regulators to address are whether rounding should occur on the total transaction rather than individual items, whether sales taxes should be calculated before or after rounding and what disclosures should appear on customer receipts.
The legislation would also require the Federal Reserve Board to develop a strategic plan and provide periodic reports on coin terminal operations and the stability of the nation’s coin distribution system.
Greater Oversight Urged
America’s Credit Unions said greater oversight could improve coordination among organizations involved in coin production, processing, transportation and distribution and help identify vulnerabilities before they result in widespread shortages.
“Maintaining a reliable coin supply is an important component of the broader payments ecosystem, particularly for credit union members and small businesses that continue to rely on cash transactions,” the organization said in its letter.
America’s Credit Unions Senior Vice President of Advocacy Greg Mesack signed the letter.
