U.S. House of Representatives unanimously passed a bipartisan financial services bill Monday aimed at preventing the financial exploitation of seniors and other vulnerable adults.
H.R. 500, the Financial Exploitation Prevention Act, sponsored by Capital Markets Subcommittee Chairwoman Ann Wagner (R-MO), passed the House by a vote of 419 to 0, and now awaits action by the Senate.
“The Financial Exploitation Prevention Act will provide our vulnerable investors with an important layer of protection to help make sure that they receive the hard-earned savings that they have built up over the years,” Wagner said in a statement. “Financial exploitation of seniors is elder abuse and, tragically, about 20% of senior investors fall prey to financial fraud, losing an estimated $2.9 billion annually. I hope the Senate takes up this bill immediately so vulnerable investors have the protections they deserve.”
Specifically, the bill would give the financial industry better tools to address suspected financial exploitation and abuse of seniors and those with mental and physical disabilities. First, the bill requires the Securities and Exchange Commission to report to Congress on recommendations for legislative and regulatory changes on how to combat financial exploitation of seniors and vulnerable adults.
Second, the bill permits a registered open-end investment company or transfer agent for that company, including mutual funds, to better protect seniors by delaying the redemption period of any redeemable security if it was reasonably believed that such redemption was requested through the financial exploitation of a security holder who is a senior or an individual unable to protect their own interests.
“Millions of seniors across the country, including my own mother, have been the victims of financial scams, and far too many have been cheated out of their retirement savings. Every few weeks, when I get a call from someone who’s fallen prey to a shameless huckster,” said Rep. Josh Gottheiemer (D-NJ), a member of the Financial Services Committee. “Our seniors should be spending time with their kids, grandkids, and friends—not staying up late at night worrying about whether someone is preying on their retirement nest egg. And we must be protecting those with mental and physical disabilities from predators who want to take advantage of them.”
The House approved the same measure by voice vote in 2021, but the Senate never took it up before the previous Congress concluded at the end of last year. Wagner wasted little time bringing the bill back in the new Congress.
A pair of major financial industry associations have already expressed support for the measure.
“Mutual funds are key to building financial security for the majority of households in the U.S., and around a third of those are seniors. The bipartisan Financial Exploitation Prevention Act is an important step to protecting seniors and vulnerable adults from manipulation and elder fraud by enhancing safeguards around redemptions,” Investment Company Institute (ICI) President and CEO Eric Pan said in a statement.
The Insured Retirement Institute (IRI) expressed its strong support for the bill in a letter to Rep. Wagner. The legislation is one of IRI’s legislative priorities included in its Retirement Security Blueprint.
“The prevention of financial exploitation and the protection of older and vulnerable Americans is a top legislative and regulatory objective for IRI,” said Wayne Chopus, IRI President and CEO. “Our members are on the front lines of this issue, working with clients across America every day. As a result, they are often the first to notice that a client may be the victim of a financial crime.”
Given its unanimous bipartisan support in the House, it is expected that the Senate will also approve the measure, but the timing of the upper chamber of Congress taking any action is highly unpredictable.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
