STOP Payments Fraud Act of 2026

This proposed legislation introduces significant amendments to the Expedited Funds Availability Act, primarily aiming to enhance fraud prevention in financial transactions. It seeks to modify existing rules governing when deposited funds must be made available to customers, specifically targeting situations involving potentially fraudulent checks and wire transfers. The changes are designed to reduce financial losses for both depository institutions and consumers by providing more flexibility in managing suspicious transactions. A core provision allows depository institutions to delay the availability of funds from a deposited check if they possess reasonable suspicion that the check is false, unauthorized, or otherwise fraudulent. Similarly, the bill introduces an exception for wire transfers, permitting delays if there is reasonable suspicion of fraud. Both of these exceptions require the Board of Governors of the Federal Reserve System, jointly with the Director of the Bureau of Consumer Financial Protection, to prescribe detailed regulations defining these standards and ensuring proper implementation. Furthermore, the legislation addresses situations with greater fraud risk , such as those involving new accounts, by allowing for extended funds availability delays for up to 60 days under specific, regulator-defined circumstances. To protect consumers, institutions must provide clear notice when funds are delayed due to suspected fraud. Crucially, if a wire transfer is delayed due to fraud suspicion and the customer was not properly notified, the institution is prohibited from assessing overdraft fees that would not have occurred had the funds been available.