The U.S. House of Representatives passed a bipartisan financial services bill today which would strengthen protections preventing the financial exploitation of seniors and other vulnerable adults by granting investment firms and financial institutions the legal authority to temporarily pause suspicious transactions.
H.R. 2478, the Financial Exploitation Prevention Act, sponsored by Rep. Ann Wagner (R-MO) and Rep. Josh Gottheimer (D-NJ), passed the House by a bipartisan vote of 414 to 2, and now awaits action by the Senate.
The bill allows open-end investment companies (such as mutual funds and ETFs) and their transfer agents to delay the redemption of securities for an initial fifteen business days if there is a reasonable belief of financial exploitation. The redemption pause can be extended for an additional 10 business days or longer if mandated by state regulators or a court.
The protections in the legislation target "specified adults," defined as individuals age 65 or older and vulnerable adults with mental or physical impairments. The bill requires the Securities and Exchange Commission (SEC), in consultation with federal regulators, to report to Congress on policy recommendations to better mitigate senior financial abuse.
"Every American deserves the confidence that the savings they've worked a lifetime to build will be protected from financial exploitation,” said National Association of Insurance and Financial Advisors (NAIFA) President Christopher L. Gandy, LACP. “H.R. 2478 provides financial professionals and institutions with an important tool to help identify and stop suspected fraud before irreversible harm occurs. NAIFA applauds the House for its bipartisan support of this commonsense legislation and urges the Senate to act so seniors and other vulnerable adults can benefit from these critical protections."
A’s support of H.R. 2478 is rooted in a continued mission to protect American’s most vulnerable citizens, Gandy added. With one out of every five seniors becoming victims of financial fraud, “it is imperative protections are put into place and strengthened to ensure these investors in the twilight of their years are afforded the proper protections.”
The companion bill in the Senate, S. 2840, was introduced by Senator Bill Hagerty (R-TN) and Senator Ruben Gallego (D-AZ) and now awaits further action within the chamber.