WASHINGTON — Support is building for legislation that aims to help financial professionals reduce elder financial fraud by providing them a safe harbor if they report it to state or Federal regulatory and law enforcement entities.
The House passed the bill by voice vote Tuesday after it was reported out by the House Financial Services by a unanimous 59-0 vote June 15.
Specifically, H.R. 4538 provides that banks, credit unions, investment advisers, broker-dealers, and insurance companies and certain supervisory, compliance and legal employees of these entities would be protected from civil or administrative liability as long as these employees received training in how to spot and report predatory activity and disclose any possible exploitation of senior citizens with reasonable care to state or Federal regulatory and law enforcement entities. The bill was originally introduced by Sen. Susan Collins, R-Maine, and Sen. Claire McCaskill, D-Missouri, last year. They are the chairman, and ranking minority member, respectively, of the Senate Special Committee on Aging. It is based on legislation enacted in Maine.
However, the Senate Aging panel does not have the authority to report out the bill, and it is currently languishing in the Senate Banking Committee.
The bill has strong financial industry support, including that of the National Association of Insurance and Financial Advisers (NAIFA), the Insured Retirement Institute (IRI), SIFMA and the North American Securities Administrator Association (NASAA).
Jules Gaudreau, NAIFA president, said the bill will remove barriers that might otherwise discourage the reporting of such suspected exploitation to authorities.
“We look forward to working with you to put in place meaningful public policies to protect seniors from financial fraud and to incorporate protections for NAIFA members when reporting suspected financial abuse of a senior client,” he said.
NAIFA noted that a 2011 study by MetLife estimated that U.S. seniors lose an estimated $2.9 billion each year to financial fraud. NAIFA noted that a separate study by Allianz found that senior fraud victims lost an average of $30,000 each, and 10 percent lost $100,000 or more.
Cathy Weatherford, president and CEO of the Insured Retirement Institute, added that, “With the population of older Americans expected to double in size to nearly 84 million Americans by 2050, this will only necessitate more concerted efforts to protect the nation’s most vulnerable.
“Preventing financial elder abuse and protecting older Americans is a core component of our retirement security advocacy agenda, and as such, the Senior$afe Act has the full-endorsement of IRI,” she said.
Judith M. Shaw, NASAA president and Maine securities administrator, added that earlier this year, state securities regulators, working through NASAA, voted to approve model legislation to address issues facing broker-dealers and investment adviser firms and their employees when confronted with suspected financial exploitation of seniors and other vulnerable adults.
She said that NASAA’s model legislation and the Senior$afe Act may differ in some aspects but share a common goal of protecting seniors by increasing the early detection and reporting of financial exploitation targeting this population.
“The Senior$afe Act also is an important complement to the Senior$afe Act training for financial institutions developed by NASAA in conjunction with the Maine Council for Elder Abuse Prevention,” she added.
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