The House on Monday handed a bipartisan invoice that targets to stop the monetary exploitation of aged and disabled Americans by means of scammers amid a surge in such crimes that experience impacted one in 5 senior voters.
Introduced by means of Rep. Ann Wagner, R-Mo., the Financial Exploitation Prevention Act would permit a registered open-end funding corporate like those who perform many mutual finances to prolong the redemption length of a safety in the event that they somewhat consider it was once asked in the course of the monetary exploitation of a senior citizen over the age of 65 or an individual with disabilities who can not give protection to their pursuits. The House handed the invoice on a 419-0 vote Monday night.
“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 mentioned in remarks at the House flooring. “However, according to the National Adult Protective Services Association, only one in 44 cases is ever even reported.”
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“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 defined.
Under the invoice, the corporate may just to begin with prolong redemption for as much as 15 days after which an extra 10 days in the event that they decide there was once monetary exploitation. It would additionally require the Securities and Exchange Commission (SEC) to make legislative and regulatory suggestions to stop the monetary exploitation of aged and susceptible adults.
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Current federal regulation prohibits a fund’s switch agent who suspects monetary exploitation from delaying the disbursement or redemption of finances whilst an investigation happens. However, the SEC and the Financial Industry Regulatory Authority (FINRA) issued a letter in 2018 informing monetary companies that the businesses would not take antagonistic motion in the event that they prolong a transaction suspected of being monetary exploitation.
The Financial Exploitation Prevention Act would codify that coverage into regulation, giving monetary companies a better degree of assurance that they may be able to take motion to pause suspicious transactions whilst investigations happen into conceivable monetary exploitation.
House Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C., spoke at the flooring in strengthen of this invoice and famous that it was once the primary law complex by means of his committee within the new Congress. He additionally thanked Ranking Member Maxine Waters, D-Calif., who additionally spoke in desire of the invoice, for the bipartisan strengthen for the law.
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The invoice now heads to the Senate the place it faces an unsure destiny. During the closing Congress, a previous model of the Financial Exploitation Prevention Act handed the House on a voice vote however wasn’t regarded as by means of the Senate sooner than the consultation ended.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) famous in an advisory on elder monetary exploitation issued in June 2022 that the “majority of incidents go unidentified and unreported as victims may choose not to come forward out of fear, embarrassment, or lack of resources.”
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FinCEN defined additional that “Older adults are targets for financial exploitation due to their income and accumulated life-long savings, in addition to the possibility that they may face declining cognitive or physical abilities, isolation from family and friends, lack of familiarity or comfort with technology, and reliance on others for their physical well-being, financial management, and social interaction.”
According to the FinCEN document, greater than 62,000 suspicious job studies associated with elder monetary exploitation had been filed in 2020 that the Consumer Financial Protection Bureau estimated to be valued at $3.4 billion – an building up from $2.6 billion in 2019.