Panel backs bill letting banks temporarily hold suspected exploitation transactions

The Committee on Financial Institutions and Pensions voted to advance HB2591, a bill that would permit financial institutions to report suspected financial exploitation of an adult account holder to law enforcement or the Department for Children and Families and to place temporary holds on transactions flagged as suspicious.

Jason Thompson, an adviser to the committee, summarized the bill’s main provisions: financial institutions could report suspected exploitation to a designated agency (law enforcement or DCF), notify adults designated as trusted contacts by the account holder, and place a temporary hold on flagged transactions; holds could be extended by request of an investigating agency or by court order. "This is the bill about... being permitted to report suspected financial exploitation of an adult account holder to a designated agency," he said.

Emily Beam, a principal at Beam Consulting Group appearing for the Kansas Credit Union Association, told the committee the bill would allow a financial institution to delay a suspicious transaction for up to 10 business days after a fraud report is made to law enforcement or DCF; if the investigation remains ongoing, law enforcement or DCF may request an additional 30 business days and further extensions would require a court order. Beam emphasized that DCF is an approved reporting agency and "do not have authority to withhold any transactions"; their role is investigative. She described existing federal rules — including customer identification programs and suspicious activity reports (SARs) under the Bank Secrecy Act — that already require institutions to document risk profiles and escalate concerns.

Kelly Vanzwal of the Kansas Bankers Association said banks follow the same federal compliance framework and described internal risk profiling, audits, and documentation requirements for SARs. She told the committee the measure has passed in more than half of U.S. states "and we have not had any issues come up with it yet," and said institutions take withholding authority seriously.

During questioning, members pressed witnesses on safeguards. Representative Kaylor proposed requiring a secondary sign‑off (teller plus supervisor/manager) before funds are held and adding explicit language that a temporary hold should not be based solely on age, perceived vulnerability, the size or timing of a transaction, or the account holder’s refusal to provide information — rather, a pattern or serial indicators should support a hold. Chair indicated the committee would advance the bill today and consider filing a friendly amendment on the House floor to incorporate such guardrails.

A member moved to pass HB2591 favorably out of committee and the motion was seconded; the committee approved the motion by voice vote. The transcript records 'aye' responses but does not include a roll‑call tally. The committee also asked staff and witnesses to continue work on amendment language for floor consideration.