Legislation that would help financial advisers combat financial exploitation of senior citizens gained House approval Monday night in a bill that could provide a vehicle to get it through the Senate.
House lawmakers passed on voice vote a larger bill that contained the Senior Safe Act, a measure that provides liability protection for investment advisers, brokers and other financial professionals who report cases of suspected elder abuse to regulators or other authorities.
The Senior Safe Act was also included in a larger bill approved by the Senate Banking Committee in December that would reform parts of the Dodd-Frank financial law.
But the bill the House passed on Monday may provide the smoothest pathway to full Senate approval for the elder-abuse legislation because the Senate Banking bill could get hung up in the House.
"This [House bill] that it is attached to seems the least controversial piece of legislation that contains Senior Safe Act provisions," said Paul Richman, vice president of government affairs at the Insured Retirement Institute. "That's why we're hopeful that this House bill will be taken up expeditiously in the Senate."
The Senior Safe Act, written by Sens. Susan Collins, R-Me., and Claire McCaskill, D-Mo., was approved by the House in a previous Congress but failed to make it through the Senate when one senator placed a hold on the bill. It had to be reintroduced in the current congressional session.
Another obstacle facing the bill is a difficult Senate agenda that includes approving a budget and tackling immigration legislation.
"This is still high on their list in the Senate, but until other issues are resolved, it will be difficult to move it forward," Mr. Richman said.
If the bill is approved by Congress, it would bring a federal law into the senior financial exploitation area.
A Financial Industry Regulatory Authority Inc. regulation goes into effect on Feb. 5 that gives brokers safe harbor to report exploitation and allows them to place temporary holds on disbursements from accounts of elderly clients who may have been victimized by scams.
Also, a number of states have approved a North American Securities Administrators model rule that is similar to the Finra regulation but that mandates incident reporting.
The Senior Safe Act has wide support among financial industry trade associations and other organizations, including IRI, NASAA, the American Council of Life Insurers and the Investment Company Institute.