The STOP Payments Fraud Act of 2026 amends the Expedited Funds Availability Act to grant financial institutions greater authority to delay funds availability when there is a reasonable suspicion of check or wire transfer fraud.
Young Kim
Representative
CA-40
The STOP Payments Fraud Act of 2026 amends the Expedited Funds Availability Act to provide financial institutions with greater authority to delay the availability of funds when there is a reasonable suspicion of fraud. The bill empowers the Federal Reserve and the CFPB to establish new regulatory frameworks for managing high-risk check deposits and suspicious wire transfers. Additionally, it mandates a comprehensive study by the Comptroller General to evaluate the effectiveness of these fraud protections and identify further opportunities for reform.
Banks Get New Power to Hold Your Checks and Wires for 45 Days Under Proposed Fraud Rules
The STOP Payments Fraud Act of 2026 is designed to give banks more breathing room to catch scammers, but it might mean you wait a lot longer for your money to clear. The bill shifts the Federal Reserve’s job from making sure checks clear as fast as possible to having the option to slow things down if fraud is spiking. Most notably, it introduces a new 'reasonable suspicion' rule that lets a bank freeze a check or wire transfer if they think something looks fishy, effectively giving them a longer leash to hold onto your cash while they investigate.
The 45-Day Deep Freeze
Under this bill, if a bank employee has a 'reasonable suspicion' that a check is fake or unauthorized, they don't have to follow the usual quick-turnaround rules. Instead, new regulations would allow for an initial 10-day hold, which can be extended up to a whopping 45 days (Section 3). Imagine you’re a freelance graphic designer who just landed a big contract; if the bank flags that deposit, you could be staring at an empty balance for six weeks while the bureaucracy grinds away. While the bank has to tell you why they’re holding the money, 'reasonable suspicion' is a pretty broad term that could lead to more frequent delays for regular people.
Wire Transfers Join the Waiting Game
Historically, wire transfers have been the go-to for speed—usually hitting your account within a business day. This bill changes the game by applying those same fraud-suspicion holds to incoming wires (Section 4). If you’re a homebuyer trying to close on a house or a small business owner waiting on a payment to cover Friday’s payroll, a 45-day hold isn't just an inconvenience; it’s a potential disaster. The bill does offer one small olive branch: if the bank holds your wire and doesn't give you proper notice, they can't charge you overdraft fees if your account dips into the red because that money was missing.
Discretionary Deadlines and Future Rules
Right now, the law says the Federal Reserve must keep check-clearing times as short as possible. This bill changes that 'shall' to a 'may' (Section 2), giving regulators the power to prioritize fraud prevention over speed. It also sets up a joint task force between the Fed and the CFPB to look at specific 'classes' of checks—like maybe all checks over a certain amount or from a specific region—and temporarily extend hold times for everyone in that group for up to a year. While the goal is to stop the billions lost to scammers, the trade-off is a banking system that moves a lot slower for the rest of us.