Financial Exploitation Prevention Act of 2025
Financial Exploitation Prevention Act of 2025
Plain Language Summary
# Financial Exploitation Prevention Act of 2025 - Summary **What It Would Do** This bill would allow investment companies and transfer agents (financial intermediaries) to temporarily halt the withdrawal of money from mutual funds and similar investments if they suspect an older adult or person with a disability is being financially exploited or scammed. Specifically, the freeze would apply to people age 65 and older, or anyone 18+ with a mental or physical impairment that prevents them from protecting their own finances. The company could delay the redemption (withdrawal) request while investigating whether fraud or exploitation is occurring. **Who It Affects and Key Details** The bill protects vulnerable populations—seniors and people with disabilities—from losing their life savings to financial scams and exploitation.
Investment companies would have the authority to pause withdrawal requests they believe are fraudulent, potentially giving authorities time to investigate and protect the victim's assets. The bill establishes procedures for how long these delays can last and what protections apply, though the summary provided doesn't specify all those details. **Current Status** The bill (HR 2478) was introduced in the 119th Congress by Representative Ann Wagner (R-MO) and is currently in committee, meaning it hasn't yet been debated or voted on by the full House of Representatives.
CRS Official Summary
Financial Exploitation Prevention Act of 2025This bill establishes procedures for delaying the redemption of certain securities if an investment company or agent believes that an older individual or an individual with certain impairments has been financially exploited.Specifically, the bill allows for the delay of the redemption of a security issued by an open-end investment management company and serviced by a transfer agent if the company or agent reasonably believes the redemption involves the financial exploitation of an individual (1) age 65 or older, or (2) age 18 or older who is unable to protect his or her own interests due to a mental or physical impairment. (Open-end investment management companies offer securities in pooled investment vehicles such as mutual funds. Transfer agents facilitate certain transactions for corporations and investment companies, including dividend distribution and change of securities ownership.)The company may initially delay the redemption for up to 15 days and, upon making a determination of exploitation, may delay the redemption an additional 10 days. A state regulator, appropriate administrative agency, or court may extend this period. In the event of delay, the company must hold the amounts related to the redemption in a demand deposit account. The bill also establishes notification requirements. The bill requires the registered open-end investment company and transfer agent to notify the Securities and Exchange Commission (SEC) if they elect to comply with the procedures established under this bill. Additionally, the SEC must make recommendations to address the financial exploitation of these adults.
Latest Action
Placed on the Union Calendar, Calendar No. 313.