Financial Exploitation Prevention Act of 2021

Floor Speech

Mr. Speaker, I rise in support of my bill, H.R. 2265, the Financial Exploitation Prevention Act, a bipartisan bill that will help us combat the financial exploitation of seniors and other vulnerable adults.

I thank Congressman McHenry and Chairwoman Waters for supporting this important legislation.

Financial exploitation of seniors and other vulnerable adults is a serious and growing problem.

The number of Americans ages 65 and older is projected to nearly double, from 52 million in 2018 to 95 million by 2060. This represents an increase from 16 to 23 percent of the U.S. population being 65 years old and older.

Right now, approximately 44 percent of households headed by a baby boomer and 30 percent of silent generation households own mutual funds.

As more investors age into retirement, the risk of financial exploitation for elderly households only increases. Roughly one in five senior investors are victimized by financial fraud, and those investors lose an estimated $2.9 billion annually in reported cases and, unfortunately, some estimates indicate that only 1 in 44 cases of financial abuse is ever reported.

My bill proposes a solution to fight elder abuse in the context of mutual funds.

Since some mutual fund shareholder accounts are held directly with a mutual fund and serviced by the fund's transfer agent, or ``direct-at- fund'' accounts as they are known, the transfer agent is typically responsible for opening and servicing the accounts, maintaining account records, and serving as the fund's point of contact with those shareholders.

Under current law, when a fund's transfer agent suspects financial exploitation in a direct-at-fund account, it cannot lawfully delay the disbursement of redemption proceeds while an investigation occurs.

My legislation codifies a SEC-issued no-action letter from 2018 that permits a mutual fund and its transfer agents to delay the redemption period of a security if it is reasonably believed that a request was made by exploiting seniors or other vulnerable adults.

This will provide our potentially vulnerable investors with an important layer of investor protection to help make sure that they receive the hard-earned savings that they have built up over the years.

Additionally, and importantly, my bill also requires the SEC to report to Congress on additional potential legislative solutions on how to further combat financial exploitation of seniors and vulnerable adults.

This legislation, Mr. Speaker, is needed to provide certainty to protect our seniors, and I strongly urge my colleagues to support the Financial Exploitation Prevention Act.

BREAK IN TRANSCRIPT

Mrs. WAGNER. Mr. Speaker, I again, thank the chairwoman and her team for making this very important piece of legislation that is so important to our seniors and to our vulnerable adults happen.

Again, in 2018, the SEC put this together as something we should be strongly looking at as we move forward. I am pleased we were able to bring it to the floor today in a bipartisan fashion.

I urge all of my colleagues to support my bill, H.R. 2265, the Financial Exploitation Act of 2021, and I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source