Fraud prevention

Borrowers from certain nonbank lenders that have been identified as magnets for Paycheck Protection Program scams also committed check fraud at elevated rates, according to a new data analysis. Banks could use that kind of data from the pandemic-era government program to spot bad actors.

Fraudsters continue to impersonate owners of small and midsize businesses at a rate comparable to the early days of the pandemic. Many lenders can take simple steps to mitigate it.

The firms respectively settled the regulator’s allegations about suspicious activity reports and the duty of best execution — two major areas of emphasis.

Fraud has evolved to defeat existing federal Customer Identification Program requirements. It’s time for regulators to modernize them.