Governor blocks Mobile Bank app bill linked to gay crime

Gov. Kathy Hochul vetoed a mobile banking app security bill that was prompted by the murders of two gay New Yorkers.

The Financial App Security Act would have required mobile banking apps like Zelle, Venmo and CashApp to require the use of a personal identification number (PIN) when a user has made any transaction that exceeds a monetary limit of their choosing.

The bill would also require a PIN before making payments to another user whose account was created less than 24 hours before the transfer, any payment transaction greater than three made in the same hour, any attempt to log into the service using a new or unrecognized device, and any other situations that indicate fraud. Most financial institutions, including official banking sites, already have similar, though not identical, security measures in place.

The bill’s sponsors, state Sen. Brad Hoylman-Sigal (D-Manhattan), a gay man who represents the West Side of Manhattan, including Chelsea and Hell’s Kitchen, and Assemblywoman Grace Lee (D-Manhattan), who represents Lower East Side, were inspired to draft the legislation in response to the 2022 deaths of two gay men, Julio Ramirez and John Umberger.

Both Ramirez and Umberger were drugged and robbed of thousands of dollars through electronic applications using facial recognition software that accessed their bank accounts.

LGBTQ and non-LGBTQ bar patrons were victimized in identical schemes, which were carried out by several gangs who figured out how to exploit the mobile banking app’s security features and access victims’ financial information while they were incapacitated.

Supporters of the bill believe that requiring the use of a PIN could have prevented many victims from being robbed.

“This bill was unfortunately inspired by the deaths of two men in our Senate district who were victims of heinous violence,” Hoylman-Sigal told the Hell’s Kitchen website. W42ST.

“And the reason was clear. The perpetrator drugged and drained their bank accounts and did so because they knew these financial apps like Zelle were notoriously porous and easily accessible. We believe that the corporations that own and operate these apps have a responsibility to limit fraud on their platforms, and we do not believe that they are meeting that responsibility at this time.”

The bill was supported by Manhattan District Attorney Alvin Bragg, who written letters of Zelle, Venmo and CashApp, urging them to add additional consumer protections.

In his veto, Hochuls argued that requiring apps to include PINs for security “would require the use of onerous banking security measures commonly used by the largest financial institutions.”

In it veto note, the governor, a Democrat, wrote: “This legislation includes requirements that conflict with the Department of Financial Services’ banking regulations and other technical challenges that could prevent compliance and unnecessarily restrict user access to these widely used applications “.

Following the unanimous approval of the legislation in both chambers of the legislature, a technology lobby group, the Chamber of Progress, urged Hochul to oppose the bill, arguing that it would “expose consumers to increased financial fraud and economic hardship.”

As has become all too common for elected Democrats in recent years, Hochul sided with lobbyists and financial institutions.

Hoylman-Sigal said she plans to reintroduce a new version of the bill next year.

“I don’t understand why common sense security measures are considered onerous when every major financial institution except these apps uses them,” he said. “Our fight is not over. We’re going back to the drawing board, talking to adversaries, but continuing to raise the alarm about the lack of security and accountability on the part of the companies that operate these peer-to-peer mobile apps.”

Lee was more direct in her assessment of the governor’s actions.

“The bank lobby killed this bill, but I will not back down,” Lee wrote on X. “I will continue to fight to put the safety of New Yorkers ahead of corporate interests.”

Linda Clary, Umberger’s mother, expressed disappointment with the governor’s veto.

“New York has a chance to lead the country on this legislation and protect citizens,” she said Gay City News in a statement. “It is disappointing that the governor has chosen to oppose this effort to protect citizens. It would have been a step in the right direction and a chance for New York to lead.”