Fraud is a growing area of concern for credit unions across the country. Unfortunately, Californians have been victims of fraud more than any other state.
Credit unions have reported instances of members falling victim to romance scams, purchasing products from a “fake business,” and much more. California’s Credit Unions has spent years sharing member stories with U.S. senators and representatives in Congress about the growing threat of fraud against consumers and the economy.
However, legislators are taking action this year — and Californians are taking the lead.
On March 10, Rep. Young Kim (R-CA) shared with a group of stakeholders from an array of industries that fraud is one of her top concerns. To illustrate her point, the congresswoman said that “California has more flavors of fraud than Baskin Robbins.”
Kim is a leader who puts words into actions. Recently, she introduced the No More Scams Act, which would create an interagency task force of federal agencies. The task force will focus on how to prevent and recover fraud involving federal dollars; however, the task force will also be responsible for identifying fraud trends, which can be helpful to credit unions.
During the meeting, Stephanie Cuevas, senior vice president of federal advocacy for California’s Credit Unions, shared with the audience and congresswoman the credit union difference. “Credit unions have reached over 29,000 students through financial literacy workshops,” Cuevas said. “But the growing concern among our credit unions is fraud. How can credit unions engage with Vice President JD Vance’s task force on fraud prevention?”
The congresswoman lauded credit unions for their leadership in financial education — but in response to the question, she said she needs credit union member stories that can be shared with other legislators. Kim also shared that financial education is needed in the cryptocurrency space, which is quickly growing.
Kim is not the only Californian in Congress leading on fraud prevention. Rep. Lou Correa (D-CA) recently introduced the bipartisan Safeguarding Consumers from Advertising Misconducts (SCAM) Act. The bill requires online websites and social media platforms to be accountable for displaying paid advertisements from fraudulent companies.
Specifically, platforms must remove scam ads within 72 hours, or they may be subject to fines. The bill also forces social media platforms to verify advertisers’ identities by reviewing government-issued identification or proof-of-business existence.
“Every day, millions of hard-working American taxpayers on Main Street are falling victim to social media ad scams that are cheating them out of their hard-earned money,” Correa said. “Social media companies making money from ads have a responsibility to make sure they’re not fraudulent and put consumers first.”
California’s Credit Unions spoke at length with the congressman about romance scams and other challenges related to fraud during a local gathering at Credit Union of Southern California in 2024. At the meeting, Correa pledged to find a legislative solution to the evolving problem. Since then, fraud prevention has been a consistent topic of discussion during advocacy days in Washington, D.C. with the congressman and his congressional staff.
A common theme among the bills introduced by Kim and Correa is that both expand the fraud discussion beyond financial services.
At the Government Affairs Conference (GAC) in Washington, D.C. earlier this month, U.S. Treasury Department Deputy Assistant Secretary for Financial Institutions Policy John Crews shared in an exclusive meeting with California’s Credit Unions, Nevada’s Credit Unions, and Utah’s Credit Unions that Treasury is taking a “full government approach” that extends beyond traditional financial regulators to include telecommunications and social media platforms — recognizing that the vectors of fraud often exist outside the financial system.
At California’s Credit Unions, the advocacy team is coordinating with legislators on both sides of the aisle — and regulators — to develop legislative solutions that address fraud. Credit unions consistently take great strides and care to make the consumer whole. Other industries and stakeholders must be good-faith partners in the war against fraud.
