New law of July 1 will allow banks to freeze accounts for up to 30 days
A US state will allow banks to freeze accounts for up to 30 days due to suspicions of fraud against certain social groups from July 1
Starting July 1, banks and credit unions in one US state will have a new tool to combat financial fraud. A recently enacted law will allow these financial institutions to temporarily freeze accounts and delay certain transactions when there are reasonable suspicions of economic exploitation. We tell you where and who this situation will benefit.
The legislation was signed by Georgia Governor Brian Kemp as part of a package of new state laws. Among them is the HB 945 project, now called the Financial Protection Act for the Elderly and Vulnerable Adults and the Cryptocurrency Kiosks Act, which seeks to reduce losses caused by banking scams and strengthen the supervision of cryptocurrency operations, mainly to protect older adults and people with disabilities, social groups vulnerable to these crimes.
The rule authorizes banks to impose temporary restrictions on accounts belonging to an “eligible adult,” those where this person is a beneficiary, or even accounts related to someone suspected of committing financial exploitation.
Financial exploitation is understood as those movements or circumstances that indicate that an older adult or a person with a disability could be the victim of a scam or economic abuse.
According to the text of the law, an eligible adult is anyone 65 years of age or older or an adult with a disability. The goal is to prevent money from leaving the accounts while a possible scam is investigated.
The initial retention may be maintained for 15 business days. If the investigation confirms that reasonable indications of financial exploitation continue to exist, the bank may extend the block for another 15 business days, reaching a maximum of 30 days.
During this period, the financial institution must investigate the events that motivated the withholding to determine whether it should be maintained or lifted.
The law also states that, once the hold is applied, the bank or credit union must notify in writing all persons authorized to access the account and the “trusted contact” registered by the customer within three business days.
However, if the institution believes that any of the people with access to the account could be involved in the alleged financial exploitation, it will not be required to notify you about the block.
Additionally, the legislation grants legal protection to banks, credit unions and their employees when they act in good faith and with due diligence in applying these preventive measures.
HB 945 not only addresses bank fraud, it also incorporates new obligations for Bitcoin ATMs and other cryptocurrencies. Among them stands out the obligation to display clear warnings about the risk of fraud and remind users that these operations are irreversible, so the money may not be recovered if they are victims of a scam.
Likewise, commissions for using these kiosks may not exceed 18% of the transaction amount. Daily limits are also set at $2,500 for new customers and $10,000 for existing users.