The U.S. House of Representatives has advanced a bipartisan measure that would give mutual funds, exchange-traded funds and their transfer agents explicit federal authority to freeze suspicious withdrawals from older and vulnerable investors before their money disappears.
H.R. 2478, otherwise known as the Financial Exploitation Prevention Act of 2025, was passed in a landslide 414-2 vote last month. The bill now heads to the Senate, where a companion measure, S. 2840, is pending before the Banking Committee.
A nearly identical version of the legislation cleared the House 419-0 in 2023 but stalled after the Senate failed to take it up.
Sponsored by Rep. Ann Wagner, R-Mo., who chairs the House Financial Services Committee's Subcommittee on Capital Markets, and Rep. Josh Gottheimer, D-N.J., the measure amends the Investment Company Act of 1940.
It would let a registered open-end investment company or its transfer agent delay the redemption of securities for up to 15 business days when it reasonably believes a transaction involves the financial exploitation of an investor age 65 or older, or an adult with a mental or physical impairment that limits the ability to protect their own interests.
"Many seniors and vulnerable adults need that extra layer of defense from fraud that has become tragically common in today's world," Wagner said of the legislation.
Firms that elect to use the new authority could extend an initial 15-business-day hold by another 10 business days once exploitation is confirmed, bringing the maximum delay without court involvement to 25 business days. A court, state regulator or other authority could approve longer holds.
Participating investment companies would also be required to notify the Securities and Exchange Commission and to ask customers for a trusted contact who could be reached if exploitation is suspected.
The bill separately directs the SEC to report to Congress within a year on further regulatory and legislative options for reducing financial fraud against vulnerable adults.
Financial advisors already navigate a patchwork of state-level protections and a related FINRA rule that lets broker-dealers place temporary holds on suspicious disbursements. FINRA's own investor education foundation has found distinct points of vulnerability among both older adults and young investors when it comes to fraud.
The new bill would extend a comparable safeguard to the fund and transfer-agent side of the business, which had lacked similar standing authority.
The bill arrives as reported losses from elder fraud continue to climb, a trend detailed in recent reporting on seniors facing a surge in high-dollar impersonation scams.
Americans age 60 and older filed more than 200,000 complaints with the FBI's Internet Crime Complaint Center in 2025, reporting combined losses of roughly $7.7 billion, with an average loss per victim of about $38,500, according to the bureau's most recent annual report.
Separately, the Federal Trade Commission has reported that scams targeting adults 60 and older cost $2.4 billion in 2024, up from $600 million in 2020, with losses concentrated in investment schemes.
Because most incidents go unreported, the FTC estimates real losses among older adults could run as high as $81.5 billion.
Trade associations representing asset managers, broker-dealers and insurers lined up in support well before the vote.
The Insured Retirement Institute voiced its support in a June 15 letter to Wagner and Gottheimer, arguing that a reasonable window to investigate suspected fraud can mean the difference between protecting a victim's retirement savings and losing those assets forever.
IRI, whose members include life insurers, asset managers, broker-dealers and banks, noted in the letter that the earlier Senior$afe Act gave financial professionals tools to identify and report suspected exploitation but stopped short of granting explicit authority to pause a transaction.
Financial Services Institute President and CEO Dale Brown said the legislation "would equip mutual funds with tools to better help protect vulnerable investors," while noting that advisors are frequently the first to spot warning signs.
“Financial advisors are often on the front lines of detecting suspicious activity and helping protect clients from fraud and exploitation," Brown said in a statement following the House passage. "This bill would equip mutual funds with tools to better help protect vulnerable investors, while ensuring appropriate safeguards are in place."
Read more: When does a scam become elder financial abuse? There’s a fine line says litigation specialist
The Investment Company Institute, which represents mutual fund companies, likewise said the bill would provide its members with better tools to address suspected abuse of seniors and adults with disabilities.
"One in five Americans over the age of 65 has been a victim of financial exploitation, experiencing estimated losses of $2.9 billion," the institute said. "ICI urges the Senate to pass this bill without delay so seniors and other vulnerable investors can benefit from a greater level of protection.”
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