Stopping Fraudulent Payments Act
- Bill Number
- S. 4747
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2026-06-10: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- Last Updated
- 2026-06-30T21:37:20Z
AI-Generated Summary
Purpose
The legislation aims to strengthen federal efforts to prevent fraudulent or improper payments by authorizing agencies to temporarily pause, condition, or segment disbursements for further review and corrective action.
Key Provisions
- New Authority for Payment Pauses: Agencies must delay or segment a payment if it shows an elevated fraud risk based on objective indicators, such as data mismatches or anomalies from the Do Not Pay system, or improper payment estimates.
- Treasury Role: The Secretary of the Treasury can order the return of certified payment vouchers and issue corrective action orders within 2 days of identifying fraud risks.
- Agency Requirements: Actions must be documented, narrowly targeted to the risky portion of a payment, and limited to the shortest time needed for verification.
- Payee Protections: Agencies must notify payees (and relevant state or local officials) within 2 days, explain the reason, and provide a process to contest the pause. Payments must issue within 30 days (or 7 days if contested successfully).
- Segmentation Option: Agencies should allow routine payment amounts to proceed while holding only anomalous or high-risk portions for review.
- Exemptions and Protections: Law enforcement activities may be exempted on a case-by-case basis. Officers acting in good faith receive liability protections, and actions do not constitute final determinations of wrongdoing.
- Regulations and Reporting: The Treasury Secretary must issue rules within 180 days and report annually to Congress on paused payments, savings, and recommendations.
- Effective Date: Changes take effect 1 year after enactment.
Significant Changes to Existing Law
- Adds a new section 3337 to title 31 of the U.S. Code, creating explicit authority for pausing payments.
- Amends section 3325 to require disbursing officials to comply with pause orders.
- Updates sections 3527 and 3528 to provide relief from liability for officials who act in good faith to follow the new pause rules.
- These modifications expand tools for fraud detection without overriding other program-specific laws.
Potential Impacts
- On Government Agencies: Requires new internal procedures, designated officials, and coordination with the Treasury, potentially increasing administrative workload but aiming to reduce financial losses from fraud.
- On Citizens and Payees: Introduces temporary delays with notification and appeal rights, which may affect timely receipt of funds but includes safeguards against errors.
- On State and Local Governments: Extends notification requirements for federally funded programs they administer.
- Broader Effects: Could lead to measurable savings in improper payments through annual reporting, with minimal disruption to routine payments via segmentation.
Main Stakeholders Affected
- Federal agencies and their certifying and disbursing officials.
- The Department of the Treasury and the Office of Management and Budget.
- Payees, including individuals, businesses, and recipients under federal programs.
- State and local governments handling federally funded programs.
- Congress, through required reports on implementation and outcomes.
Notable Legal, Constitutional, or Political Implications
- Emphasizes objective, documented criteria to support actions, reducing risks of arbitrary decisions.
- Includes due process elements like notifications and contest periods to balance fraud prevention with payee rights.
- Provides liability shields for good-faith compliance, potentially encouraging proactive fraud checks.
- Maintains that the new rules do not supersede existing program laws, preserving statutory eligibility standards.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-10: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- 2026-06-10: Introduced in Senate
Bill Versions
- Stopping Fraudulent Payments Act — issued 2026-06-10 — PDF (12 pages)