Senate panel backs voluntary trusted‑contact program to help banks detect fraud

Summary

Senate File 4652 would authorize banks and credit unions to implement voluntary 'trusted contact' programs so a named person can be contacted if a bank detects fraud on an account; the Department of Commerce and bankers' association supported a flexible, opt‑in approach and the committee recommended the bill to general orders.

The Commerce Committee advanced a bipartisan bill that authorizes Minnesota banks and credit unions to offer a voluntary trusted‑contact program to help detect and respond to suspected account fraud.

Sen. Duckworth said the program would allow a customer to designate one or more trusted people a bank could contact if red flags appear; Tess Rice, general counsel for the Minnesota Bankers Association, described the bill as a flexible, optional fraud‑prevention tool that many banks already use but have hesitated to offer because of liability concerns.

Rice told senators the program could be implemented in different ways — from limited notification to broader access chosen by the account holder — and emphasized oversight by regulators such as the Department of Commerce and federal banking authorities. Some senators asked whether there should be standardized requirements for what a trusted contact can be permitted to do; committee members noted the bill is intentionally flexible to encourage broader adoption while remaining optional for customers.

The committee recommended SF4652 to general orders on a voice vote.