Trade Associations Support Bipartisan Bill to Combat Elder Financial Exploitation

SIFMA, the Investment Company Institute ("ICI") and a number of other financial trade associations expressed support for the "Financial Exploitation Prevention Act," a bipartisan bill to "provide critical tools to address suspected financial exploitation of [seniors]."

In a letter to Senators Bill Hagerty and Ruben Gallego, sponsors of the legislation, the associations said they are in the best position "to notice the signs of possible financial abuse of vulnerable clients" and are "best positioned to report it."

The Financial Exploitation Prevention Act would permit a registered investment company or its transfer agent to postpone the payment date after the sale of fund shares if the transaction involves suspected financial exploitation of a senior security holder. The ICI asserted "[t]his additional time is vital because once assets have been disbursed, they are difficult to [recover]." The legislation would also direct "the SEC to make legislative and regulatory recommendations to address financial exploitation of seniors and other vulnerable adults."

In addition, the ICI asserted that traditional fraud detection methods are becoming obsolete "as bad actors use sophisticated Generative AI tools to perpetrate increasingly complex schemes, [including] advanced synthetic identity creation and digital account opening fraud." The ICI reported that "one in five Americans over age 65 has been a victim of financial exploitation, with losses estimated at $2.9 billion annually."