Toward fighting increased check fraud across America, U.S. Rep. Young Kim (R-CA) on June 18 sponsored legislation that would amend current federal law regarding cases of fraudulent checks or wire transfers.
Specifically, the Strengthening Transaction Oversight and Preventing (STOP) Payments Fraud Act of 2026, H.R. 9331, would permit financial institutions to place extended holds on suspicious checks and wire transfers while potential fraud is investigated, according to a bill summary provided by the congresswoman’s staff.
“Check fraud can wipe out a family’s savings overnight while leaving financial institutions responsible for covering the losses,” said Rep. 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.”
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 summary says.
If enacted, H.R. 9331 would close this gap by allowing financial institutions additional time to investigate flagged checks and wire transfers before funds are released. In turn, this would help prevent fraud before consumers suffer financial losses, said Rep. Kim.
The bill has been referred for consideration to the U.S. House Financial Services Committee.