Press Releases

Today, the House Financial Services Committee is holding a Financial Institutions Subcommittee hearing, led by Subcommittee Chairman Andy Barr (KY-06), to deepen the Committee’s ongoing work on fraud by focusing on the role of financial institutions within the broader anti-fraud ecosystem.

Read Subcommittee Chairman Barr's opening remarks as prepared for delivery:

"Good morning. 

"Today’s hearing continues this Committee’s work to combat the growing threat of financial fraud and scams harming American families, seniors, and small businesses across our country. Fraud and scam losses are not abstract statistics – they represent retirement savings wiped out, college funds drained, and small business savings accounts emptied overnight. 

"The scope of the problem is staggering. According to the FBI, Americans reported $16.6 billion in cybercrime losses in 2024 – a 33 percent increase over the prior year. 

"Criminals are becoming more sophisticated – leveraging artificial intelligence, voice cloning, spoofed caller IDs, fake investment platforms, and coordinated money mule networks. They are exploiting social media platforms, telecommunications infrastructure, and cross-border networks to deceive Americans at scale. 

"And yet, even as these schemes often originate outside the financial system – and frequently outside our borders – banks and credit unions are often the last lines of defense. 

"Financial institutions of all sizes are devoting substantial resources to fight fraud and scams. They are investing heavily in data analytics, machine learning, and artificial intelligence to detect suspicious activity within milliseconds. They are deploying real-time transaction alerts and customer education campaigns to encourage their customers to remain vigilant and spot common flags before funds have left their accounts. 

"Community banks and credit unions – despite having fewer resources – are stepping up with employee training, enhanced check verification procedures, and partnerships with local and national law enforcement. 

"The Trump Administration has also taken significant steps to address this escalating problem. President Trump’s Executive Order “Modernizing Payments to and from America’s bank accounts” directs Treasury to transition away from paper checks – which are far more susceptible to theft and alteration – and toward more secure electronic payments. This shift will help safeguard Americans’ tax refunds and benefits while protecting taxpayer dollars from criminal activity. 

"President Trump has also removed barriers to American leadership in artificial intelligence – recognizing that innovation is essential if we are going to outpace technologically savvy criminals. But despite these efforts, serious structural challenges remain. 

"First, our legal framework for information sharing is outdated. Fraud today is networked, cross-institutional, and real-time, yet privacy statutes, antitrust concerns, and uncertainty under consumer reporting laws limit the ability of financial institutions to share data in ways that could identify mule networks and coordinated fraud patterns.   

"Second, funds availability rules under Regulation CC were written for a very different era – when the primary risk was banks holding checks too long, not criminals exploiting mandatory next-day availability to drain accounts before investigations can detect fraud. 

"Third, our financial regulators often lack robust understanding of artificial intelligence and machine learning – preventing the establishment of clear guardrails for financial institutions. With well-defined expectations, financial intuitions will be better positioned to confidently adopt these technologies – or partner with innovative third parties – to more effectively detect and prevent fraud. 

"Lastly, law enforcement faces real constraints including insufficient penalties for fraudsters, limited resources and lack of coordination between Federal and local officials. 

"At the same time, we must also guard against proposals that could unintentionally fuel more scams. Placing liability on financial institutions when a consumer mistakenly authorizes a payment or transfer – often referred to as scams – does not address the underlying root causes of scams and could worsen the problem by increasing instances of first-party criminal activity. It would also impose significant financial strain on smaller banks and credit unions, which lack the substantial profits needed to absorb large scam-related losses. 

"Our focus today is straightforward: how do we empower financial institutions to better deter, detect, and mitigate fraud – without creating perverse incentives or unintended harm?

"I look forward to hearing from our witnesses and working with my colleagues to strengthen our nation’s defenses against financial fraud and scams."

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