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.