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Kansas bill would let banks and credit unions notify 'trusted contacts' and pause suspicious transactions
Summary
HB 2591 would authorize financial institutions to notify a designated trusted contact and place short-term holds (10 business days, with possible extensions) on transactions when they suspect financial exploitation of an adult account holder; credit unions, banks, AARP and the Department of Insurance provided supportive testimony and operational details.
A House committee heard proponent testimony for HB 2591, a bill that would give financial institutions optional authority to maintain a trusted-contact program and allow them, after reporting suspected exploitation to a designated agency, to place a temporary hold on suspect transactions.
Committee staff summarized the bill’s key elements: institutions may report suspected financial exploitation in good faith to law enforcement or the Kansas Department for Children and Families; they may notify an adult-designated trusted contact; and they may place an initial temporary hold on a suspicious transaction for up to 10 business days, with extensions (an additional 30 business days) if a designated agency requests it or through court order.
Emily Beam of the Kansas Credit Union Association said the measure “includes 2 key tools for financial institutions to protect their members from fraud” and urged a favorable recommendation. Hannah Anderson of Azure Credit Union described a pilot trusted-contact program and a front-line example: “we did save her $15,000 from being wired out before we were finally able to convince her,” she said, illustrating how a pause can prevent irreversible losses.
Witnesses emphasized safeguards and limits. Multiple testifiers clarified that a trusted contact cannot transact on an account and that the trusted-contact program is opt-in; however, the transaction-delay authority is separate and can be used when an institution sees red flags even if there is no trusted contact on file. Kelly Van Zwolle of the Kansas Bankers Association said banks will be required to follow internal steps, report to a designated agency before placing a hold, and that model policies and training will be developed for members.
Representatives from the Kansas Department of Insurance described a related 2024 law covering securities professionals and reported limited but meaningful use in its first year: 16 delays protecting about $1.7 million and 140 reports to the department. Testimony and Q&A focused on operational questions (how quickly institutions will act, thresholds for red flags, and how trusted-contact information is verified). The committee closed the hearing with no opponents on record; no committee votes were taken.
