Section 1 Short title
This Act may be cited as the “Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026” or the “STOP Payments Fraud Act of 2026”.
Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026
A BILL
To amend the Expedited Funds Availability Act to provide exceptions in the case of fraudulent checks or wire transfers, and for other purposes.
Sec. 2 Parity of availability for certain checks
in subsection (d)—
by striking “shall” and inserting “may”; and
by striking “to as short a time as possible and equal”; and
by adding at the end the following:
“(g) Parity of Availability for Certain Checks During Times of Material Fraud Losses
“(1) Determination
“(A) Before the date that is six months from the date of enactment of the Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026, the Board, jointly with the Director of the Bureau of Consumer Financial Protection, shall determine, with respect to each class of checks described in paragraph (5), whether the provisions of paragraph (3) should apply to that class of checks.
“(B) After the date that is six months from the date of enactment of the Strengthening Transaction Oversight and Preventing Payments Fraud Act of 2026, the Board, jointly with the Director of the Bureau of Consumer Financial Protection, may determine, with respect to a class of checks described in paragraph (5), that the provisions of paragraph (3) should apply to that class of checks.
“(2) When making a determination under paragraph (1), the Board and the Director of the Bureau of Consumer Financial Protection shall consider—
“(A) whether the Treasury of the United States or depository institutions, as applicable, are experiencing material losses from fraud related to that class of checks; and
“(B) the impact that a determination under paragraph (1) would have on persons sending or receiving checks of such class of checks.
“(3) If the Board, jointly with the Director of the Bureau of Consumer Financial Protection, makes an affirmative determination with respect to a class of checks under paragraph (1), then—
“(A) notwithstanding subsection (a), funds deposited in an account at a depository institution by checks of such class shall be available to the same extent as funds shall be available when deposited by check drawn on a local originating depository institution under subsection (b)(1); and
“(B) the Board, jointly with the Director of the Bureau of Consumer Financial Protection, no later than 60 days after the date of the determination, shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives explaining the basis for such affirmative determination.
“(4) In respect of each determination under paragraph (1), the provisions of paragraph (3) are effective for a time to be determined by the Board, jointly with the Director of the Bureau of Consumer Financial Protection. Such period may be no longer than one year.
“(5) The classes of checks described in this paragraph are the following:
“(A) The class of checks described in subsection (a)(2)(A).
“(B) The class of checks described in subsection (a)(2)(F).”
Sec. 3 Exception to funds availability requirements in the case of fraud
in paragraph (1)—
in the heading of the paragraph, by striking “In general” and inserting “Collectability”; and
by inserting after “subsections (a)(2), (b), (c), and (e) of section 603” the following: “and paragraphs (1) and (3) of subsection (a) of this section”;
by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), respectively;
by inserting after paragraph (1) the following:
“(2) Fraud
“(A) Regulations—In accordance with regulations which the Board, jointly with the Director of the Bureau of Consumer Financial Protection, shall prescribe, subsections (a)(2), (b), (c), and (e) of section 603 and paragraphs (1) and (3) of subsection (a) of this section shall not apply with respect to any check deposited in an account at a depository institution if the receiving depository institution has reasonable suspicion to believe that the check is false, unauthorized, or otherwise involves fraud. For purposes of the preceding sentence, reasonable suspicion to believe that a check is false, unauthorized, or otherwise involves fraud requires the existence of indicators that would lead a reasonable person to suspect that the check involves fraud. Such reasons shall be included in the notice required under subsection (f).
“(B) Delayed availability—The regulations issued pursuant to this paragraph shall prescribe an initial hold (time period of delayed funds availability), not to exceed 10 days, an extended hold (time period of delayed funds availability), not to exceed 45 days, to allow the receiving depository institution to determine if it has reasonable suspicion under subparagraph (A). The regulations may prescribe different initial and extended hold timelines based on the dollar amount of the funds in question and other relevant criteria. The regulations may also include conditions a receiving depository institution must satisfy with respect to any hold or delay of funds availability pursuant to this paragraph.
“(C) Additional notice—The regulations issued pursuant to this paragraph may provide for additional notifications to a payor, a receiving depository institution, and a depositor beyond what is otherwise required pursuant to subsection (f) to keep relevant persons informed of the status of a hold.
“(D) Rule of application—A receiving depository institution that has reasonable suspicion to believe that a check is false, unauthorized, or otherwise involves fraud, as described in subparagraph (A), may also have reasonable cause to believe that such check is uncollectible from the originating depository institution, as described in paragraph (1).”
in paragraph (4), as so redesignated, by striking “paragraph (1)” and inserting “paragraph (1) or (2)”.
Sec. 4 Exception to funds availability requirements in the case of certain accounts and fraudulent wire transfers
In general— Section 604 of the Expedited Funds Availability Act (12 U.S.C. 4003) is amended by adding at the end the following:
“(g) Application of certain exceptions in circumstances with greater fraud risk—With respect to an account established at a depository institution, and without regard to whether the account was established by a new depositor, upon the occurrence of circumstances identified by rule by the Board, jointly with the Director of the Bureau of Consumer Financial Protection, as associated with greater fraud risk, the provisions of paragraphs (1) through (3) of subsection (a) shall apply with respect to any deposit in such account for a period of time determined by rule by the Board, jointly with the Director of the Bureau of Consumer Financial Protection, but not to exceed 60 days for each such occurrence.
“(h) Reasonable suspicion exception for wire transfers
“(1) In general—In accordance with regulations which the Board, jointly with the Director of the Bureau of Consumer Financial Protection, shall prescribe, section 603(a)(1)(B) and subsection (a)(1)(B) of this section shall not apply with respect to funds received by a depository institution by wire transfer if the receiving depository institution has reasonable suspicion to believe that the wire transfer is false, unauthorized, or otherwise involves fraud. For purposes of the preceding sentence, reasonable suspicion to believe that a wire transfer is false, unauthorized, or otherwise involves fraud requires the existence of indicators that would lead a reasonable person to suspect that the wire transfer involves fraud. Such reasons shall be included in the notice required under subsection (f).
“(2) Delayed availability—The regulations issued pursuant to this subsection shall prescribe an initial hold (time period of delayed funds availability), not to exceed 10 days, an extended hold (time period of delayed funds availability), not to exceed 45 days, to allow the receiving depository institution to determine if it has reasonable suspicion under paragraph (1). The regulations may prescribe different initial and extended hold timelines based on the dollar amount of the funds in question and other relevant criteria. The regulations may also include conditions a receiving depository institution must satisfy with respect to any hold or delay of funds availability pursuant to this subsection.
“(3) Additional notice—The regulations issued pursuant to this subsection may provide for additional notifications to a payor, a receiving depository institution, and a depositor beyond what is otherwise required pursuant to subsection (f) to keep relevant persons informed of the status of a hold.
“(4) Basis for determination—No determination under this subsection may be based on any class of wire transfers or persons.
“(5) Overdraft fees—If the receiving depository institution determines that a wire transfer for credit to an account is a wire transfer described in paragraph (1), the receiving depository institution shall not assess any fee for any subsequent overdraft with respect to such account, if—
“(A) the depositor was not provided with the written notice required under subsection (f) (with respect to such determination) at the time the wire transfer was delayed for credit; and
“(B) the overdraft would not have occurred but for the fact that the funds so transferred are not available.
“(6) Compliance—Each agency referred to in section 610(a) shall monitor compliance with the requirements of this subsection in each regular examination of a depository institution. For the purpose of this paragraph, each depository institution shall retain a record of each notice provided under subsection (f) as a result of the application of this subsection.
“(i) Rule of construction—Nothing in this Act may be construed to restrict or prohibit a depository institution involved with a deposit by check or wire transfer from communicating to any other depository institution also involved with the deposit that a depository institution has invoked an exception under this section to some or all of the requirements of section 603 with respect to the deposit.”
Time for notice— Section 604(f)(2)(C) of the Expedited Funds Availability Act (12 U.S.C. 4003(f)(2)(C)) is amended by striking “subsection (d) or (e)” and inserting “subsection (c)(2), (d), (e) or (h)”.
Sec. 5 Study and report on funds availability
Study— The Comptroller General of the United States shall conduct a study of—
State laws addressing funds availability and safeguards to protect against fraud, including permitted hold periods for investigating fraud concerns;
the extent to which depository institutions make funds available to consumers for local and nonlocal checks prior to the expiration of maximum hold periods;
the length of time within which depository institutions involved with a deposit by check conduct investigations of the nonpayment of local and nonlocal checks;
the appropriateness of the time periods and amount limits applicable under sections 603 and 604, as in effect on June 30, 2026; and
administrative and legislative reform options to further mitigate payment fraud risk and any associated consumer harm, including with respect to forms of payments covered and not covered by the Expedited Funds Availability Act.
Report to Congress— Within nine months of the effective date of rules implementing this Act, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the findings of the study required under subsection (a).
Sec. 6 Rulemaking required and delayed effective date
Rulemaking required— Not later than one year after the date of enactment of this Act, the Board of Governors of the Federal Reserve System, jointly with the Director of the Bureau of Consumer Financial Protection, shall adopt final rules implementing the amendments made by section 3(a)(3) and section 4.
Delayed effective date— The amendments made by section 3(a)(3) and section 4 shall take effect 60 days after the rules described in subsection (a) are adopted.