The left’s unrelenting regulatory assault on our nation’s financial institutions took a major leap forward this morning with House and Senate Democrats announcing the introduction of a bill titled Protecting Consumers from Payment Scams Act. The bill would update the Electronic Fund Transfer Act (EFTA) by shifting the cost of online payment scams that occur on such P2P payment platforms as Zelle and Venmo to innocent bank customers.

Said CASE chairman Gerard Scimeca, “This effort is a thinly veiled political attack on the nation’s financial institutions disguised as consumer protection.

“Once again we see Democrats pushing legislation that shifts the costs of the misdeeds of others onto honest consumers,” continued Scimeca. “Fraud is always a concern in any financial transaction at any level, yet fewer than 0.1% of transactions conducted on Zelle involved reported incidents of fraud. House and Senate Democrats are ignoring that the platforms targeted by this overbearing and wholly unnecessary piece of legislation have gone to great lengths to help their customers avoid and report scammers and fraudsters.”

Scimeca noted robust in-app alerts that are presented to users to complement the partnerships with the Better Business Bureau and the National Council on Aging to increase awareness about would-be scammers and their tactics. Zelle’s Scam and Fraud Elimination (S.A.F.E.) Squad educational campaign has also aimed to reach younger users who are—shockingly for digital natives—three times more likely to be ensnared in an online scam than older users, according to a Deloitte survey

“There is no denying that the ultimate effect of this legislation will be to punish consumers and small businesses and incentivize criminals.

“New mandates on financial institutions always and invariably result in higher costs and fewer available services for consumers, and this legislation is no different. By shifting the financial burden of scams onto payment platforms and banks, these financial services companies will have no choice but to pass the costs of reimbursing victims and complying with regulations to their customers. Further, heavy-handed government regulations will result in greater restrictions and higher barriers to using these extremely convenient and wildly popular payment options. That’s the hidden cost of regulation that punishes consumers and businesses alike.

“At a time when consumers are paying over $3 trillion per year in economic output to comply with government regulations, more regulations that make online financial transactions more expensive are the absolute wrong approach. Stronger law enforcement and higher penalties for criminals, along with greater consumer awareness to avoid scams is a far better answer than another layer of bureaucratic rules and higher costs, stifling free enterprise. We urge the rejection of this dangerous and costly legislation.”