Stopping Fraudulent Payments Act

Key Points

• Federal agencies would gain the power to temporarily pause, delay, or segment payments when fraud indicators are detected. This applies before a payment voucher is certified, giving agencies a chance to catch suspicious transactions before money goes out the door.
• When only part of a payment looks suspicious, agencies must let the normal, expected portion go through while holding back the unusual or high-risk amount. This protects legitimate recipients from losing their entire payment over a partial concern.
• People whose payments are paused must be notified within 2 days. The notice must explain why the money was held and how to contest the decision. If the payment is found to be legitimate, it must be released within 30 days, or within 7 days if the person successfully contests the hold.
• The Treasury Department must publish regulations within 180 days of enactment, and the law's payment-pausing powers take effect one year after enactment. Annual reports to Congress will track how many payments were paused, how much money was saved, and how often valid payments were incorrectly flagged.
• Federal employees who pause payments in good faith are shielded from personal liability. The bill also makes clear that pausing a payment is not a final judgment that the recipient did anything wrong.