Fraud is having a moment. Unfortunately, it’s not the good kind.
The numbers are jarring: $132 billion in payment fraud losses in 2023, $12.5 billion in consumer scam losses in 2024, and a record-breaking $16.6 billion in cyber-related crime losses that same year. And it’s getting worse. Deloitte projects that AI-enabled fraud could reach $40 billion in the United States by 2027. Fraudsters aren’t just opportunists anymore. They’re organized, AI-powered, and, frankly, extremely motivated. Deepfakes that can clone your loan officer’s voice. Synthetic identities that spend months building credit before vanishing. Romance scam bots managing dozens of victims simultaneously without a human ever touching the keyboard. If it sounds like a streaming crime series, that’s because it basically is, except the victims are your members and the losses are very real.
Credit unions have been fighting this battle largely on their own, absorbing resources, staff time, and emotional energy trying to protect members from criminals who don’t respect regulatory, or frankly, any boundaries.
The good news? Washington is starting to pay attention.
The Executive Order
Earlier this month, President Trump signed an Executive Order directing a comprehensive review of the tools available to combat transnational criminal organizations behind cybercrime and fraud. The order calls for an action plan to identify and dismantle criminal networks, prioritizes prosecution of cyber-enabled fraud, and directs the Attorney General to explore returning seized funds to victims.
Is this a magic wand? No. But it signals that fraud is now a whole-of-government priority which is exactly what the industry has been calling for. As many credit unions can attest, law enforcement’s resource limitations often mean they can’t engage unless losses are large enough; a threshold that feels pretty cold comfort when your member just wired their savings to a romance scammer.
The TRAPS Act
New York Credit Union Association members made the TRAPS Act—the Taskforce for Recognizing and Averting Payment Scams Act—a top priority at America’s Credit Unions’ Governmental Affairs Conference last week, and it’s easy to see why.
The bipartisan bill would establish a Treasury-led federal task force drawing from the NCUA, CFPB, FCC, FTC, DOJ, credit unions, banks, digital payment networks, consumer groups, and the tech sector. The task force would examine fraud trends, coordinate prevention, and issue annual reports for three years.
In other words: someone would actually be in charge of a national strategy. Imagine that.
The New York Credit Union Association and America’s Credit Unions have been clear that this kind of collaborative, whole-of-government approach is exactly what’s needed and that credit unions also need broader safe harbor protections for information sharing and greater regulatory clarity on liability, particularly around electronic transfers.
What This Means for New York Credit Unions
The pressure on credit unions is real. Fraud losses are outpacing loan losses at some institutions. Staff are spending considerable time on education and monitoring. And members are increasingly targeted by AI-enhanced schemes that exploit trust and urgency in equal measure.
The Executive Order and the TRAPS Act won’t solve the problem overnight, but they represent meaningful momentum toward a coordinated national strategy the industry has been seeking. In the meantime, credit unions should continue investing in staff training, member education, and fraud transaction monitoring because no amount of federal coordination fully compensates for a member who has decided to trust a scammer.
The fight against fraud is a team sport. New York credit unions have been showing up to practice for years. Nice to see the rest of the team finally suiting up.
Until Next Time
From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.