The Cost of Crime

Hand in hand with the effort to make funds quickly available to customers through the Expedited Funds Act and Regulation CC comes the concern of losses through check fraud and kiting schemes. How much does this really cost banks? In his statement to the House Committee on Banking and Financial Services, Governor Edward Kelly, Jr, stated that "losses from criminal activities do not pose a systemic risk to the banking system", based on "1994 estimates of approximately $800 million in losses associated with check fraud and $700 million from credit card fraud." The Federal Reserve will be conducting a survey on fraud losses and to determine whether there are ways in which the Expedited Funds Act and Regulation CC can be amended to reduce losses.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 5, 3/96