Money Mule Activity Surges 25% at US Community Banks and Credit Unions

U.S. community banks and credit unions are facing a significant surge in money laundering activity as criminal networks pivot away from automated bot attacks toward human-led mule operations. New data indicates that while traditional fraud sessions are declining, the sophistication and volume of illicit fund movements through mid-market institutions are reaching critical levels.

What was announced

Research conducted across more than 250 financial institutions reveals a 25% increase in digital banking sessions involving attempted money laundering at U.S. community banks and credit unions between the second half of 2025 and the first half of 2026. This rise in activity was accompanied by a 27% increase in the average value of transfers associated with these "mule" accounts. The data suggests a professionalization of laundering tactics, with more than 50% of detected mule sessions now originating from new devices, a technique used to bypass traditional hardware-based security filters and obscure past transaction histories.

The findings highlight a fragmentation strategy employed by criminals to evade internal bank triggers. On average, money mules transferred only 38% of their total account balance in a single payment, opting instead to split sums into smaller, less conspicuous outbound transfers. Despite the rise in laundering, other forms of cybercrime showed a notable decline during the same period; the number of suspected fraud sessions dropped by 11%, while bot-driven activity fell by 15%. The report also features a 40-day case study of a single retail account at a U.S. credit union, illustrating how behavioral intelligence can pinpoint laundering patterns that traditional monitoring might miss.

The companies involved

BioCatch is a specialist in behavioral biometrics and digital fraud prevention, focusing on the analysis of user behavior to distinguish between legitimate customers and bad actors. The company is a subsidiary of Permira Advisers LLP, a global private equity firm that holds a majority stake in the business. BioCatch has become a prominent source of market intelligence in the fintech sector, with its technology currently utilized by over 250 financial institutions to monitor digital sessions for signs of account takeover, social engineering, and laundering. The company’s platform analyzes thousands of behavioral signals—such as typing patterns and device interaction—to provide real-time risk assessments.

St. Mary’s Bank, which provided insights into the evolving threat landscape, is a New Hampshire-based institution recognized as the first credit union in the United States. As a member-owned cooperative, it represents the mid-market financial sector that is increasingly targeted by sophisticated laundering operations. Under the guidance of Fraud Manager Lisa Allard, the institution has focused on leveraging behavioral intelligence to identify hidden account relationships and mitigate the risks associated with the misuse of legitimate banking technologies.

What FF News has reported before

FF News has closely followed the global escalation of device-centric fraud through BioCatch’s ongoing research. We previously reported on how Spanish Banks Hit by 150% Surge in Fraud from Stolen Devices, a trend that mirrors the current shift toward new-device exploitation in the U.S. market. Our coverage also highlighted that 90% of Banking Scams Now Target Mobile Devices, reinforcing the importance of mobile-first security strategies. Additionally, we have examined the international response to these threats, including how the UK and Cambodia Unite Against Scam Centres, and noted that U.S. Impersonation Scam Losses Skyrocket 130% as criminals adopt more convincing social engineering tactics.

What this means

The decline in bot activity suggests that automated defenses are successfully deterring low-level attacks, but the surge in money laundering indicates that criminals are moving deeper into the financial system. For community banks and credit unions, this is a pivotal moment. These institutions are clearly being targeted as the "path of least resistance" for laundering networks that may find Tier-1 global banks too difficult to penetrate. The industry now faces a significant challenge: mid-market institutions must decide if they can afford to maintain traditional, reactive security models, or if the rising cost of mule activity will force a universal shift toward proactive behavioral monitoring.