Vermont committee reviews draft letting banks pause suspect transactions for up to 15 business days

The Vermont House Committee on Commerce and Economic Development examined draft legislation that would let banks and credit unions temporarily delay or refuse customer-directed transactions when they reasonably suspect financial exploitation.

Maria Royal of the Legislative Council, who walked the committee through the language, said the proposal would add a new subchapter to Title 8 (Chapter 200) to give covered entities tools to protect customers while preserving access to funds. Royal read the bill's intent and definitions, saying the measure would apply to "banks and credit unions" and would define financial exploitation to include the "wrongful or unauthorized taking, withholding, appropriation, transfer, expenditure or use of a customer's money, assets, or property" through deception, coercion or undue influence.

Under the draft's central provision, a covered entity that "reasonably believes" a customer is or has been the victim of financial exploitation could take steps including delaying or refusing transactions, refusing withdrawals or disbursements, preventing changes in account…