Governor Kathy Hochul on Dec. 13 vetoed legislation crafted to protect users of peer-to-peer money transfer apps in the aftermath of a string of deadly attacks in recent years targeting gay men who were robbed by assailants who took advantage of security loopholes to steal thousands of dollars.
Brad Hoylman-Sigal, an out gay state senator representing Manhattan’s west side, was motivated to take action on the issue alongside Manhattan Assemblymember Grace Lee. The pair introduced legislation known as the Financial App Security Act, which would have forced such money-sharing platforms to implement enhanced security features like requiring users to enter a pin number for many transactions. The bill would have also paved the way for money-sharing apps to have users specify a monetary amount that would trigger a PIN requirement. Among other elements, the bill would have outlined specific actions that would have required the use of a PIN.
The bill sought to close a loophole that ultimately made it possible for the attackers to pounce on the victims. The attackers were aware that peer-to-peer transfer apps could utilize face ID technology to unlock victims’ phones and access their bank accounts to steal money, and that’s what they did: Two of the most prominent cases involved victims Julio Ramirez and John Umberger, two gay men who were in and around nightlife establishments when they were attacked, killed, and robbed of thousands of dollars via the money sharing platforms. Several individuals were arrested in connection with the string of crimes, and at least one, Eddie Ashley, pleaded guilty.
Other officials, including city lawmakers and Manhattan District Attorney Alvin Bragg, have also called for action to address the issue. Bragg wrote letters to CEOs of multiple peer-to-peer money-sharing platforms earlier this year, encouraging them to “take further action to protect … customers from fraud and theft by adopting additional security measures to deter this illegal activity both locally and across the country.”
The Financial App Security Act unanimously cleared both houses of the State Legislature during Pride Month this year — a seemingly no-brainer initiative to bolster security at a time when many individuals utilize such apps.
Hochul released a veto memo justifying her opposition to the legislation, saying the bill “would mandate the use of onerous banking security features” that are “commonly utilized by the largest financial institutions.”
The governor further wrote that she supports “expanding consumer protections in this space,” but added that “this legislation includes requirements that conflict with Department of Financial Services banking regulations and other technical challenges that could hinder compliance and unnecessarily restrict users’ access to these widely-used applications.”
The governor’s office, when asked f0r comment, would only point to Hochul’s veto memo.
Hoylman-Sigal said in a written statement to Gay City News that he is “disappointed” in the governor for vetoing the bill, which he said would have aligned peer-to-peer payment apps with the security features offered by traditional banks.
“It’s inexplicable to me why common-sense security measures to protect consumers are viewed as onerous when major financial institutions use them,” Hoylman-Sigal told Gay City News. “Despite the veto of this bill, the fight isn’t over.”
Hoylman-Sigal said he and Lee wrote the bill in conjunction with Bragg’s office.
“These were crimes that shocked the conscience and should not go unanswered from public policymakers, which we resolve to do by continuing to raise the alarm about the lack of security and responsibility from the operators of peer-to-peer mobile payment apps,” Hoylman-Sigal said.
Hoylman-Sigal has encouraged financial institutions to boost security and reimburse victims following attacks. In February of last year, he called on JP Morgan Chase & Co. to improve protections against fraud after one of his constituents said he was unable to get his money back ffrom Chase after it was stolen through Zelle.
Lee also criticized the veto.
“The bank lobby killed this bill, but I won’t back down,” Lee said on X. “I’ll keep fighting to put the safety of New Yorkers above corporate interests.”
Zelle did not respond to a request for comment by press time.
Linda Clary, whose late son, Umberger, was one of the victims, expressed dismay over the veto. Like in other cases, the attackers used facial recognition software on his phone to steal thousands of dollars.
“I am grateful for the hard work and efforts of State Senator Hoylman-Sigal and Assemblywoman Lee,” Clary told Gay City News on Dec. 18. “New York has a chance to lead the country on this legislation and protect citizens. It is disappointing the governor chose to veto this effort to protect citizens. It would have been a step in the right direction and a chance for New York to lead.”
Clary added that she feels concerned that some of New York’s elected officials are not interested in deterring crime — particularly crimes targeting vulnerable individuals.
“New York is such a great state and New York City is the greatest in the world, but people don’t feel safe to visit and my son was killed,” she said.
