2025 Regulatory Summit

Court Decision

• Motion to dismiss denied in part — NYAG’s case goes forward. • Judge held that some wire-fraud-adjacent transfers are covered by EFTA/Reg. E, even when “ancillary” to interbank wires. • Bank-to-bank wire transfers still exempt under EFTA’s text. • EFTA’s wire exemption does not cover the initial debit from consumer to their bank — even if later tied to a full wire transaction. • Judge Oetken treated this as a question of first impression.

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Implications

• Banks must reimburse victims for full amount of fraudulent wires (after notice). • Must provisionally credit within ~10 business days. • Flips Article 4A regime – Reimbursement not required if an unauthorized payment order is “effective,” which requires that: • (i) an agreed-upon, commercially reasonable security procedure is in place; and • (ii) the bank proves that it accepted the payment order in good faith, in compliance with the security procedure, and in compliance with customer instructions. • Impacts:

– Rewrite customer agreements. – Overhaul security procedures. – Reprice wire fees. – Potentially withdraw online/mobile wire offerings. • Risk: higher costs + reduced consumer access to wire services.

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