WASHINGTON, D.C.—Today, Congresswoman Young Kim (CA-40), a member of the House Financial Services Committee, introduced the Strengthening Transaction Oversight and Preventing (STOP) Payments Fraud Act, which allows financial institutions to place extended holds on suspicious checks and wire transfers while potential fraud is investigated.
Check fraud has surged in recent years, with criminals stealing more than $1.3 billion from consumers and financial institutions in 2023 and 2024 alone. Under current law, financial institutions are required to make funds available within a prescribed timeframe, even when a transaction raises red flags. As a result, institutions may be forced to release funds before they can fully investigate suspicious checks or wire transfers, creating opportunities for fraudsters to exploit the system.
The STOP Payments Fraud Act closes this gap by allowing financial institutions additional time to investigate flagged checks and wire transfers before funds are released, helping prevent fraud before consumers suffer financial losses.
“Check fraud can wipe out a family’s savings overnight while leaving financial institutions responsible for covering the losses,” said Rep. Young Kim. “Our laws shouldn’t force banks to release funds before they have the opportunity to investigate suspicious transactions. The STOP Payments Fraud Act gives financial institutions the time they need to stop fraud before it happens and better protect Americans’ hard-earned money.”
Read the full bill text HERE.
