Representative Young Kim has introduced a new bill, the “Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026,” or “STOP Payments Fraud Act of 2026,” designed to grant financial institutions extended authority to place holds on suspicious checks and wire transfers. The proposed legislation seeks to amend current law, which often mandates the release of funds within a prescribed timeframe, even when transactions raise fraud concerns.
According to a Thursday (June 18) press release from Kim, the bill aims to empower banks to conduct thorough investigations before funds are made available. “Our laws shouldn’t force banks to release funds before they have the opportunity to investigate suspicious transactions,” Kim stated. She added, “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.”
The introduction of this bill comes amidst a documented resurgence in payments fraud. An April report from PYMNTS, citing the Federal Reserve Financial Services (FRFS) Risk Officer Survey, highlighted that check fraud continues a multiyear resurgence, with wire fraud remaining a persistent threat. The survey, based on responses from over 400 financial institutions, identified check fraud as the second most frequently reported type of fraud, trailing only debit card payments.
Specifically, 63% of the surveyed financial institutions reported experiencing check fraud attempts, with 31% incurring losses from these incidents. Wire transfer fraud also presented a significant challenge, with 19% of financial institutions reporting attempts and 2% experiencing losses in this category, according to the FRFS report.
Further underscoring the urgency, the Financial Crimes Enforcement Network (FinCEN) reported in 2023 a nationwide surge in check fraud. FinCEN attributed this rise to criminals increasingly targeting the U.S. Mail and United States Postal Service mail carriers. Beyond stealing checks, these criminals often exploit personally identifiable information found in stolen mail for future fraudulent activities.
The sophistication of fraud schemes is also on an upward trajectory. The PYMNTS Intelligence report, “2025 State of Fraud and Financial Crime in the United States,” revealed that a growing proportion of financial institutions perceive fraud sophistication to be rising sharply. The share of institutions reporting a sharp increase in fraud scheme sophistication over the previous year climbed from 35% in 2024 to 46% in 2025.
The “STOP Payments Fraud Act of 2026” represents a legislative effort to provide financial institutions with critical tools to combat these evolving and persistent fraud threats, potentially safeguarding both institutional assets and consumer funds from illicit activities.
