Rep. Young Kim has introduced a bill that would allow financial institutions to place extended holds on suspicious checks and wire transfers while investigating potential fraud.
The “Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026“ (“STOP Payments Fraud Act of 2026”) aims to change the current law that requires financial institutions to make funds available within a prescribed timeframe, even when the transaction is suspicious, Kim said in a Thursday (June 18) press release.
“Our laws shouldn’t force banks to release funds before they have the opportunity to investigate suspicious transactions,” Kim said. “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.”
PYMNTS reported in April that the Federal Reserve Financial Services (FRFS) Risk Officer Survey, which is based on responses from more than 400 financial institutions, found that check fraud continues a multiyear resurgence and that wire fraud remains persistent.
The report found that check fraud is the second most frequently reported type of fraud, behind only debit card payments. Sixty-three percent of the financial institutions surveyed said they had experienced check fraud attempts, and 31% reported losses from it.
In addition, 19% of financial institutions said they had experienced wire transfer fraud attempts, and 2% reported losses in this category, according to the FRFS report.
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In March, PYMNTS reported that even as digital payment adoption accelerates, check fraud remains a source of losses for financial institutions, businesses and consumers.
The Financial Crimes Enforcement Network (FinCEN) said in 2023 that a nationwide surge in check fraud was being driven by criminals targeting the U.S. Mail and United States Postal Service mail carriers. FinCEN said that in addition to stealing checks, some criminals use personally identifiable information found in stolen mail for future frauds.
The PYMNTS Intelligence report “2025 State of Fraud and Financial Crime in the United States“ found that a growing share of financial institutions said fraud sophistication is rising. The share of financial institutions that said the sophistication of fraud schemes had increased sharply over the previous year rose from 35% in 2024 to 46% in 2025.
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