Why It Matters
Financial fraud losses reached an estimated $262 billion in 2025, and Congress is weighing whether to require or protect transaction holds at financial institutions as a countermeasure, according to a new Congressional Research Service (CRS) report. These holds are a double-edged tool: they can give institutions time to investigate suspected fraud, but they can also delay consumers' access to funds and expose institutions to liability.
Roughly half of states have laws that apply to depository institutions, according to an October 2024 Federal Trade Commission (FTC) study. Additional states have more limited laws covering only broker-dealers or investment advisers.
The Big Picture
At the federal level, section 229.54(d) of Regulation CC allows a hold on checks when a bank has reasonable cause to believe a claim is fraudulent, but analogous provisions do not generally exist for electronic transfers. For securities transactions, FINRA Rule 2165 permits a temporary hold on a disbursement from a specified adult customer's account when the firm reasonably believes financial exploitation has occurred, is occurring or will be attempted. Federal banking regulators issued an interagency statement in 2024 saying holds "should be used appropriately and in compliance with applicable laws and regulations."
Five bills in the 119th Congress address transaction holds directly:
- H.R. 2478, the Financial Exploitation Prevention Act of 2025, sponsored by Rep. Ann Wagner (R-MO-2), has passed the House; it would cover individuals 65 or older and those with qualifying impairments in mutual fund and certain securities redemptions.
- S. 2840, the Senate companion sponsored by Sen. Bill Hagerty (R-TN), remains in the Senate Committee on Banking, Housing, and Urban Affairs.
- H.R. 9331, sponsored by Rep. Young Kim (R-CA-40), was referred to the House Financial Services Committee on June 18; it would amend the Expedited Funds Availability Act to allow exceptions for fraudulent checks or wire transfers.
- H.R. 9668, sponsored by Rep. Donald G. Davis (D-NC-1), would authorize institutions to delay or refuse transactions involving exploitation of older adults and vulnerable persons; it was referred to the House Committee on Financial Services on July 14.
- H.R. 10350, sponsored by Rep. George Whitesides (D-CA), is titled a bill "to protect elders from wire fraud by imposing requirements on covered financial institutions, and for other purposes"; it was referred to the House Committee on Financial Services on Sept. 10.
The CRS report identifies unresolved questions Congress faces: whether holds effectively reduce fraud, which institutions and transactions to cover, whether holds should be mandatory or voluntary, and how federal rules should relate to state laws.
The Bottom Line
Of the five bills, only H.R. 2478 has passed either chamber; the remaining four have not cleared a chamber. The core questions of scope, mandatory versus voluntary holds and federal-state preemption remain open for Congress to resolve.
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