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Editorial: Change bank law, help Duanesburg schools recover stolen funds

Editorial: Change bank law, help Duanesburg schools recover stolen funds

Who will get Duanesburg school district its lost money back?

More than seven months have passed since the Duanesburg Central School District’s bank account was emptied out by computer hackers. All but $497,000 of the $3.8 million stolen was quickly recovered, but that sum got wired overseas to a place the United States has no reciprocity, and as a story in Wednesday’s Gazette revealed, both the school district’s bank and insurance carrier refuse to make good on the loss. A loophole in federal banking law appears to support their position — weasly though it may be — so district taxpayers will likely get stuck holding the bag. What an outrage!

It seems unbelievable that the district, through no fault of its own, is out such a substantial amount of money while the entity that last had control over it — NBT Bank — is allowed to walk away. The district is considering legal action against the bank, which it has subsequently severed its ties with, but recovery of the funds is by no means a foregone conclusion. The federal investigation into what happened has thus far failed to produce any results, and no arrests have been made.

Still, it would seem that the bank — not its customers — should be the one to take the hit when such a loss occurs. Indeed, individual customers are protected from such losses under the Electronic Funds Transfer Act; why there’s an exemption for commercial and municipal customers is anybody’s guess.

Clearly, the law needs to be changed. Sen. Chuck Schumer not only needs to pursue such a fix more quickly than he has been, he needs to look into helping make Duanesburg whole again. Half a million dollars is a lot of money to so small a school district.

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