Banks and credit unions back bill to let institutions pause suspected fraud transactions and use trusted contacts

Witnesses from financial trade groups and AARP urged the committee to support House Bill 560, which the sponsors framed as a measured way to prevent financial exploitation, especially of older Ohioans.

Andrew Cannon of the Ohio Credit Union League said the bill provides financial institutions with a tool to pause suspicious transactions and to use a designated trusted contact to help authenticate transactions. “By defining financial exploitation and providing an opportunity for financial institutions such as credit unions to place a temporary hold, this legislation could disrupt a fraudulent scam before it begins,” Cannon said, citing national trends showing growing losses to fraud.

Cannon and other witnesses told the committee training for frontline staff could be aligned with existing Bank Secrecy Act suspicious-activity training and annual training obligations. Cannon said holds would include procedures to quickly release funds if the account owner and trusted contacts confirm the transaction is legitimate.

Don Boyd of the Ohio Bankers League said banks already report suspected elder exploitation to adult protective services and that HB 560 gives clear statutory authority and liability protection to temporarily pause transactions while investigators and law enforcement act. “Being able to hit the pause button is extremely beneficial to allow cooler heads to prevail,” Boyd said.

Ben Webb of AARP Ohio supported the bill and highlighted AARP’s BankSafe training platform for frontline staff; he also urged clarity about how long courts could hold disputed funds and supported limits on how long institutions may hold funds in dispute.

No formal votes were taken; the committee concluded the second hearing after taking testimony from multiple proponents.