The Greene Room
The pending Strengthening Transaction Oversight and Preventing (STOP) Payments Fraud Act of 2026 represents one of the more significant legislative proposals affecting payment fraud in recent years. Introduced by Representative Young Kim (R-California) as H.R. 9331, the bill would amend the Expedited Funds Availability Act by creating new exceptions to the traditional rules governing the availability of deposited funds when fraud is suspected. Although still in committee, the legislation deserves the attention of every equipment finance company, lender, lessor and payment professional.
For decades, federal law has generally favored the rapid availability of deposited funds. That policy made perfect sense in an era when the greatest concern was ensuring that legitimate customers had prompt access to their money. Today’s payment landscape, however, is vastly different. Artificial intelligence, sophisticated check washing, business email compromise schemes, and increasingly convincing wire fraud have dramatically changed the risk equation. Criminals now move stolen funds in minutes rather than days, often leaving financial institutions and innocent businesses scrambling to recover losses that have already disappeared.
The STOP Payments Fraud Act recognizes that the legal framework governing payment availability has not kept pace with modern fraud. Rather than requiring financial institutions to release funds according to rigid statutory deadlines regardless of obvious warning signs, the bill would permit additional holds where there is reasonable evidence that a check or wire transfer may be fraudulent. In short, the legislation attempts to give banks more time to determine whether a transaction is legitimate before the money is gone.
From the perspective of the equipment finance industry, that is an important development.
Equipment finance transactions routinely involve substantial wire transfers, ACH payments, and cashier’s checks. Fraudsters increasingly target lenders and lessors through impersonation schemes, vendor substitution fraud, falsified payoff requests, altered wiring instructions, and compromised email accounts. In many cases, the financial institution recognizes suspicious circumstances only after the funds have already become available and have been transferred through multiple accounts.
Anyone who has represented victims of wire fraud understands the unfortunate reality. Once the money leaves the originating account and passes through several financial institutions, recovery becomes exponentially more difficult. Banks often explain—correctly—that their legal ability to reverse the transaction is limited after settlement has occurred.
The proposed legislation attempts to move the focus from recovery to prevention.
That shift is significant. The most effective fraud prevention occurs before the funds leave the banking system—not after investigators begin tracing transactions across multiple jurisdictions.
Of course, every fraud prevention measure comes with tradeoffs. Legitimate customers may experience occasional delays in receiving access to deposited funds. Commercial borrowers operating on tight cash-flow schedules may find temporary holds frustrating. Businesses accustomed to same-day availability may object to additional verification procedures.
Nevertheless, those inconveniences must be balanced against the enormous financial damage caused by payment fraud. According to numerous industry studies, business email compromise and payment fraud now result in billions of dollars in annual losses. In many cases, a short delay that allows a bank to confirm suspicious activity may save both the customer and the institution from catastrophic losses.
Even if the STOP Payments Fraud Act ultimately becomes law, equipment finance companies should not view it as a substitute for sound internal controls. Dual approval requirements for wire transfers, independent verification of changes to payment instructions, employee fraud awareness training, positive pay services, multifactor authentication, and careful vendor verification remain essential components of any comprehensive fraud prevention program.
The bill also serves as a reminder that legal rules governing payments continue to evolve alongside technology. Fraudsters constantly adapt their methods, and legislators are increasingly responding by giving financial institutions greater flexibility to identify suspicious transactions before losses occur.
Whether the STOP Payments Fraud Act passes in its current form remains to be seen. But its underlying message is unmistakable: preventing payment fraud before funds are released is far more effective—and far less expensive—than trying to recover stolen money after it has vanished.
Practice Pointer: Equipment finance companies should review their payment authorization procedures now. Regardless of whether H.R. 9331 is enacted, institutions that combine strong internal controls with careful transaction verification will be in the best position to reduce fraud losses while maintaining customer confidence.
The Law Offices of Kenneth Charles Greene present this article. All copyrightable text, the selection, arrangement, and presentation of all materials (including information in the public domain), and the overall design of this presentation are the property of the Law Offices of Kenneth Charles Greene. All rights reserved. Permission is granted to download and reprint materials from this article for the purpose of viewing, reading, and retaining for reference. Any other copying, distribution, retransmission, or modification of information or materials from this article, whether in electronic or hard copy form, without the express prior written permission of Kenneth C. Greene is prohibited. The materials available from this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any issue or problem. Use of and access to these materials does not create an attorney-client relationship between the Law Office of Kenneth Charles Greene and the user or viewer. The opinions expressed herein are the opinions of the individual author.
