Banks Gain New Fraud Tools as House Panel Advances Payments Bills

Debate among the lawmakers exposed some fundamental policy divides over how Washington should regulate an increasingly digital financial system.

The Tuesday markup that stretched across most of the day focused on a slew of bills and proposed amendments, complete with discussion over whether financial regulation should move toward uniform national standards or continue allowing states to experiment with their own approaches to consumer protection.

Several measures were ordered reported favorably to the House after the committee approved amendments in the nature of substitutes. Under House procedure, that does not automatically schedule floor consideration, but it does make the legislation eligible for consideration by the full House.

Opening the markup, House Financial Services Committee Chairman Rep. French Hill, R-Ark., argued that the financial system has evolved faster than many of the statutes governing it.

“Americans expect their personal information to be protected from bad actors, financial institutions to have the tools necessary to combat fraud, and regulators to operate with transparency and accountability,” Hill said. He added that “our regulatory framework must keep pace with that innovation.”

Among the bills considered were the Earned Wage Access Consumer Protection Act (H.R. 9330), the Strengthening Transaction Oversight and Preventing (STOP) Payments Fraud Act of 2026 (H.R. 9331), the Credit Access and Inclusion Act (H.R. 5402), and legislation restricting the collection of personally identifiable information within the Securities and Exchange Commission’s Consolidated Audit Trail, the SEC Reform and Restructuring Act.

The STOP Payments Fraud Act would amend the Expedited Funds Availability Act to permit banks to delay making funds available when they have reasonable suspicion that a deposited check or incoming wire transfer involves fraud. Rather than requiring immediate availability under existing rules, the legislation directs regulators to establish standards defining reasonable suspicion while also allowing longer holds for certain accounts experiencing elevated fraud risk.

Supporters argued that existing funds availability requirements were written long before today’s explosion in counterfeit checks, synthetic identity fraud and increasingly sophisticated payment scams.

The Credit Access and Inclusion Act would expressly permit landlords, utilities, telecommunications providers and public housing authorities to furnish payment histories to consumer reporting agencies.

Supporting lawmakers said millions of consumers consistently pay rent, electric, wireless and other recurring bills but receive little or no benefit when seeking mortgages, auto loans or credit cards because those payments typically are not reflected in traditional credit files.

The legislation would allow those recurring obligations to help establish or strengthen credit histories while preserving consumer opt-out rights and preventing utilities from reporting customers as delinquent while they remain current under approved payment plans.

Ranking Member Rep. Maxine Waters, D-Calif., argued that Congress should be strengthening consumer safeguards rather than limiting regulatory authority.

“Payment fraud is rising. Identity theft is becoming more sophisticated. Consumers continue to struggle with inaccurate credit reports that prevent them from getting a mortgage, buying a car, renting an apartment and even getting a job,” Waters said during the markup. “This should be the moment to strengthen consumer protections.”

Those competing philosophies became even more pronounced when lawmakers turned to the committee’s most contentious proposal: the Earned Wage Access Consumer Protection Act.

Federal Standards or State Oversight? Earned Wage Access Dominates Debate

Indeed, the committee’s most divisive debate centered on H.R. 9330, the Earned Wage Access Consumer Protection Act, legislation sponsored by Rep. Bryan Steil, R-Wis., that would establish the first comprehensive federal framework governing earned wage access providers. The bill requires providers that charge fees to offer a free option, mandates extensive disclosures, prohibits interest charges and debt collection, and specifies that compliant earned wage access products are not loans or extensions of credit under federal law.

For supporters, the legislation recognizes that payroll technology has evolved while pay cycles have remained largely unchanged.

Steil argued that workers increasingly expect to access wages as they earn them rather than waiting for weekly or biweekly payroll processing.

“Consumers should be able to access their wages as they earn them, while also receiving strong, consistent consumer protections,” Steil said. “The question before us is not whether earned wage access should have consumer protections. The bill answers this with a resounding yes. The question is whether we establish a uniform national framework with strong safeguards or continue to leave consumers subject to an inconsistent patchwork of state laws.”

Steil repeatedly emphasized that the proposal requires every provider charging for expedited access to also offer consumers a free alternative.

“Nobody will have to pay to be paid,” he said. Steil also challenged the notion that faster wage access represents a new financial product.

“Not that long ago, 100 years ago or more, individuals who would work over the course of a day were paid at the end of the day,” he said. “It was only in the modern era… pay began to get delayed.” Waters argued that while many workers need access to their earnings before payday, the bill would preempt stronger state consumer protection laws and weaken oversight just as earned wage access products become more widely used.

Rep. Ayanna Pressley, D-Mass., echoed those concerns, arguing that marketing often differs from how consumers actually use the products.

“This bill prevents state regulators from calling earned wage access products what they actually are, payday loans,” Pressley said.

Rep. Sam Liccardo, D-Calif., agreed that earned wage access differs from traditional payday lending because providers generally cannot pursue consumers through litigation or collections. However, he expressed concern that fees could become excessive if left entirely to market forces.

Waters proposed limiting the combined amount of fees and tips consumers could pay to $10 per month, arguing that without meaningful limits, providers would remain free to impose multiple transaction charges on financially vulnerable workers. Republicans opposed the amendment, arguing the legislation already guarantees a no-cost option and extensive disclosures. The amendment was rejected.

One bipartisan amendment was adopted. It requires consumers seeking earned wage advances based on their own representations, rather than employer-provided payroll information, to attest that the wages requested have actually been earned, adding an additional safeguard against fraud while preserving access to the product.

In a statement emailed to PYMNTS on Tuesday evening, the Financial Technology Association’s CEO Penny Lee stated that “Earned Wage Access puts workers back in control of their own paychecks.”

As for the Credit Access and Inclusion Act (H.R. 5402), the legislation would amend the Fair Credit Reporting Act to expressly permit landlords, public housing authorities, utility companies and telecommunications providers to furnish payment histories to consumer reporting agencies. Supporters argued that millions of Americans who consistently pay rent and utility bills remain “credit invisible” or possess thin credit files because those recurring payments generally are not incorporated into traditional credit scores. The bill also allows consumers to opt out of reporting and prevents energy utilities from reporting customers as delinquent while they remain current under approved payment plans.

Rep. Janelle Bynum, D-Ore., argued that expanding access to credit requires ensuring that positive payment behavior is captured as completely as possible, particularly for consumers whose financial lives are reflected more accurately through recurring household payments than through traditional revolving credit accounts. During debate on her amendment, Bynum said alternative payment data can help consumers who have historically struggled to establish conventional credit histories and urged lawmakers to ensure that responsible payment behavior is reflected fairly within the credit reporting system.

Her amendment, however, was not adopted, leaving the underlying legislation unchanged as it passed out of committee.