Regulators need to shift liability for check fraud to the bank where the check is first deposited amid a significant increase in the crime, according to IntraFi’s second quarter business outlook survey of CEOs, presidents, CFOs and chief operating officers from 471 financial institutions.
Sixty-two percent suggested shifting liability to the bank of first deposit. Ninety percent experienced occasional or frequent delays in repayment from those financial institutions. Nearly half said delays were “very common.”
Ninety percent of respondents reported an increase in check fraud in the past two-three years, according to the survey conducted online from July 1-12. Twenty-eight percent said check fraud increased by more than 50 percent, while an even share reported a 10-29 percent increase. Nineteen percent said check fraud increased 30-49 percent.
Nearly half said law enforcement should crack down harder on check fraud, compared with only 6 percent who reported that no needed changes are needed. Megabanks with more than $700 billion in assets are most frequently delinquent in bad check repayment, according to 59 percent of respondents.
Other survey findings include:
- Banks’ access to capital remained the same for 79 percent over the past year. Sixteen percent of respondents anticipate improved access in the next 12 months.
- Thirty-nine percent noted an increase in current loan demand, with the same percentage noting a decrease. Twenty-two percent report loan demand to be the same since last year. Forty-two percent expect an increase over the next year, while 23 percent expect loan demand to decrease.
- Eighty-three percent reported an increase in bank funding costs compared to last year, while only 4 percent experienced a decrease. In the next year, 37 percent anticipate a moderate decrease in funding costs.
- Deposit competition is up, with 59 percent reporting an increase. Forty-four percent expect deposit competition to stay relatively high over the next 12 months.
- Overall economic conditions were unchanged for more than half of banks; 32 percent of respondents experienced worsened conditions. Looking forward, 43 percent expect conditions to remain the same over the next year, while 38 percent anticipate a decline in economic conditions.