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91 N.D. L. Rev. 329 (2015)
Increasing the Role of Agency Deference in Curbing Online Banking Fraud

handle is hein.journals/nordak91 and id is 337 raw text is: 


                             STEPHANIE L. TANG*


     Over the past few decades, online banking has gone from a seldom-
used, novel technology to one used by over seventy percent of all bank
account holders. While online banking may present many benefits, it also
opens up consumers to many unknown risks. Fraud is one of the biggest
risks associated with online banking. Under Article 4A of the Uniform
Commercial Code, a bank is typically not liable for losses due to fraudulent
transfers if it has followed commercially reasonable security procedures
to verify the transaction. Unfortunately, this issue has been sparsely
litigated in American courts, and the small handful of cases available offers
little guidance to protect either consumers or banks.
    In Part II, this article summarizes the history of online banking and
presents the challenges banks face in growing consumer confidence.
Following in Part III, the article proceeds to analyze interagency guidance
on curbing online banking fraud and prior cases assessing the commercial
reasonableness of banking security procedures. In Part IV, the article then
explores approaches taken by the European Union and Malaysia in
combating online banking fraud and examines the crucial role of agency
deference in other areas of U.S. banking law, including bank charter
applications and the interpretation of the Glass-Steagall Act. Consequently,
in Part V, this article recommends that banks and courts should give
increased deference to existing interagency guidance and look to current,
successful initiatives developed in other countries in an effort to increase
consumer confidence in online banking and to protect banks from future

    * Associate Attorney at Hurst, Robin, & Kay, LLC; J.D., magna cum laude, University of
Illinois, 2015; B.A., Northwestern University, 2012. 1 wish to thank Summer Kim for her
mentorship and guidance, including but certainly not limited to the content of this article. I would
also like to thank my parents for their endless encouragement and Mark Scott for his undying love
and support throughout the writing process.

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