Bipartisan Senate bill targets senior financial exploitation

Bipartisan Senate bill targets senior financial exploitation
Legislation would establish a program that provides $10 million annually to states to investigate, prosecute abuse.
JAN 21, 2022

Bipartisan Senate legislation to combat senior financial exploitation gives backers hope the measure could be approved by Congress this year.

The Empowering States to Protect Seniors from Bad Actors Act would provide $10 million in grants annually to state regulators to fund investigations and prosecutions related to financial fraud involving seniors, hire staff, enhance technology and conduct public education initiatives.

The House Financial Services Committee, whose votes on most legislation over the last year have been split along partisan lines, unanimously approved similar legislation in November. The Senate companion bill was introduced Thursday by Sens. Chris Van Hollen, D-Md., Tim Scott, R-S.C., Raphael Warnock, D-Ga., and Cynthia Lummis, R-Wyo.

The House bill is awaiting a vote by the full House. The Senate bill has been referred to the Senate Banking Committee, where Van Hollen is a member. The measure could move on its own in each chamber or be attached to other legislation.

“We’re rather optimistic about its prospects,” said Dylan Bruce, financial services counsel at the Consumer Federation of America.

Bruce’s organization is one of a wide array of groups that work on issues affecting the financial advice sector that support the legislation. They include AARP, the Certified Financial Planner Board of Standards Inc., the Financial Services Institute, the Insured Retirement Institute, the National Association of Insurance and Financial Advisors, and the National Association of Personal Financial Advisors.

Probably the most ardent advocates for the bill are state regulators.

“It’s a top priority for us,” said Kristen Hutchens, deputy director of policy and government affairs for the North American Securities Administrators Association. “We’re really happy with where we are with the legislation …[and] NASAA urges swift bipartisan approval at the earliest opportunity.”

States have been pushing for the senior investor protection grant program ever since it was authorized in 2010 by the Dodd-Frank financial reform law. But it was set up in the Consumer Financial Protection Bureau and never got off the ground.

The bills being considered by Congress would move the program to the Securities and Exchange Commission, a shift in responsibility called for by Rick Fleming, the SEC's investor advocate, in his office’s report to Congress in December 2020.

The grant program would give state regulators more firepower to direct toward stopping senior exploitation. The most recent NASAA enforcement report indicates that in 2020, state regulators received 806 complaints about senior fraud, opened 595 investigations and took 290 enforcement actions.

In 2016, NASAA approved a model rule on senior financial exploitation that has been adopted by 32 states. It gives brokers and investment advisers latitude to halt disbursements from investment accounts if they believe an elderly or vulnerable person is the victim of fraud.

The coronavirus pandemic could lend more urgency to addressing senior financial fraud, as fraudsters prey on seniors who are isolating.

“The pandemic exacerbated many of the factors that contribute to the susceptibility of seniors to scams and frauds,” Bruce said.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.