Financial Exploitation Prevention Act of 2021

Mr. Speaker, I yield myself such time as I may consume.

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.

I am grateful to the chairwoman and to the ranking member and all of the committee that has worked on this in such a bipartisan fashion, Mr. Speaker, and I reserve the balance of my time.

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.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2265) to amend the Investment Company Act of 1940 to postpone the date of payment or satisfaction upon redemption of certain securities in the case of the financial exploitation of specified adults, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 2265, the Financial Exploitation Prevention Act of 2021, sponsored by the gentlewoman from Missouri (Mrs. Wagner).

It is not a surprise that adults over the age of 65 are sometimes the targets for financial exploitation and have become victims of financial crimes more than any other demographic. Just last week, in its annual report on elder fraud and abuse, the Department of Justice reported that in 2020 alone, seniors suffered over $1 billion in financial losses due to fraud.

Unlike other adults, seniors are often dependent on their savings to support them in retirement, making any fraud that much harder to recover from. Brokers and investment managers, who often stand in as the stewards of the savings of seniors, are in a unique position to protect elders from financial crimes.

In 2018, the Securities and Exchange Commission released a policy letter, called a no-action letter, stating that the Commission would not take an enforcement action against the agents of an investment company, including mutual funds, if the person paused a payment or redemption based on the suspicion of financial exploitation. This pause on cashing out the savings of a senior can provide invaluable time to ensure that the redemption is consistent with the will of the senior.

H.R. 2265 would codify this SEC letter. It would also make two further changes to describe how a mutual fund adviser can establish the process at each fund to protect seniors.

I thank Mrs. Wagner for working with my staff to craft the language in this bill. This is a helpful piece of legislation that will provide one more tool to market participants to protect investors and, in particular, our Nation's retirees.

I urge Members to support H.R. 2265, and I reserve the balance of my time.

Mr. Speaker, I have no further Democratic speakers, and I reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.