Banks can share fraud data in real time, FinCEN says

This update from FinCEN clarifies that financial institutions can legally share information about suspected fraud and scams in real-time. For merchants and lenders in the consumer financing space, this is a significant step toward reducing 'identity-swapping' and application fraud. Previously, many lenders were hesitant to share specific data due to privacy regulation concerns. Now, FinCEN has explicitly stated that sharing data to identify and stop fraud falls under protected activity. For your business, this means the lenders you partner with will have better tools to verify customer identities and flag suspicious patterns before a loan is funded. In the world of Buy Now, Pay Later (BNPL) and high-ticket financing, fraud is a major cost driver that often leads to stricter approval hurdles for legitimate customers. By streamlining how banks and fintechs communicate about bad actors, the industry can move toward more accurate approvals. While the Bank Policy Institute is still pushing for more formal laws from Congress, this clarification provides immediate 'breathing room' for financial institutions to collaborate against organized fraud rings.

Source: American Banker — Top News

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