The House on Monday passed a bipartisan bill that aims to prevent the financial exploitation of elderly and disabled Americans by scammers amid a surge in such crimes that have impacted one in five senior citizens, FoxBusiness.com reported. Introduced by Rep. Ann Wagner, R-Mo., the Financial Exploitation Prevention Act would allow a registered open-end investment company like those that operate many mutual funds to delay the redemption period of a security if they reasonably believe it was requested through the financial exploitation of a senior citizen over the age of 65 or a person with disabilities who cannot protect their interests. The House passed the bill on a 419-0 vote Monday evening. "Sadly, about one in five senior investors fall prey to financial fraud, and those investors lose an estimated $2.9 billion annually in reported cases," Wagner said in remarks on the House floor. "However, according to the National Adult Protective Services Association, only one in 44 cases is ever even reported." "This legislation would codify both a FINRA and SEC-issued no-action letter from 2018 that permits a mutual fund and its transfer agent to delay the redemption period of a security if they reasonably believe a request was made by exploiting seniors or other vulnerable adults. It does not stop this trade from going through, it just takes a pause while they check with that senior to make sure that there hasn't been fraud or elder abuse," she explained. Under the bill, the company could initially delay redemption for up to 15 days and then an additional 10 days if they determine there was financial exploitation. It would also require the Securities and Exchange Commission (SEC) to make legislative and regulatory recommendations to prevent the financial exploitation of elderly and vulnerable adults.
