Financial Exploitation Prevention Act of 2023

Floor Speech

BREAK IN TRANSCRIPT

Mrs. WAGNER. Mr. Speaker, I rise in support of my bill, H.R. 500, the Financial Exploitation Prevention Act.

It is, indeed, a bipartisan bill that will help prevent seniors and other vulnerable adults from becoming victims of fraud.

I thank Chairman McHenry for his very strong support on this important legislation and the ranking member for working with us on this legislation.

Financial exploitation of seniors and other vulnerable adults is a serious and growing problem. Over the next 10-plus years, 10,000 Americans will turn 65 every day, with seniors making up 18 percent of the Nation's population by 2030.

As more investors age into retirement, their risk of exploitation increases. Sadly, about one in five senior investors falls prey to financial fraud, and those investors lose an estimated $2.9 billion annually in reported cases.

However, according to the National Adult Protective Services Association, only 1 in 44 cases of financial abuse is ever even reported.

Right now, approximately 44 percent of households headed by a baby boomer and 30 percent of Silent Generation households own mutual funds. 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 the 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 the account records, and serving as the fund's point of contact for 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 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 that 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 has not been fraud or elder abuse anticipated.

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 for further combating financial exploitation of seniors and vulnerable adults.

Many of us have had the bittersweet experience of caring for a parent or loved one as they grow older. This legislation will give our constituents the peace of knowing that their loved ones are better protected from fraud.

Mr. Speaker, I strongly urge my colleagues to support the Financial Exploitation Prevention Act.

BREAK IN TRANSCRIPT

Source