Industry groups applaud House passage of Financial Exploitation Prevention Act

WASHINGTON, D.C. –  The Financial Services Institute applauded the U.S. House of Representatives’ passage of the Financial Exploitation Prevention Act of 2025, bipartisan legislation that would strengthen protections for seniors and vulnerable adults by amending the Investment Company Act of 1940 to give mutual funds the ability to pause redemptions when it reasonably believes it is the result of financial exploitation of the investor.

“We commend the House for passing this important investor protection legislation,” said FSI President & CEO Dale Brown. “Financial advisors are often on the front lines of detecting suspicious activity and helping protect clients from fraud and exploitation. This bill would equip mutual funds with tools to better help protect vulnerable investors, while ensuring appropriate safeguards are in place. We urge the Senate to follow suit and quickly pass this legislation.”

"Every American deserves the confidence that the savings they've worked a lifetime to build will be protected from financial exploitation,” said National Association of Insurance and Financial Advisors President Christopher L. Gandy, LACP. “H.R. 2478 provides financial professionals and institutions with an important tool to help identify and stop suspected fraud before irreversible harm occurs. NAIFA applauds the House for its bipartisan support of this commonsense legislation and urges the Senate to act so seniors and other vulnerable adults can benefit from these critical protections."

NAIFA’s support of H.R. 2478 is rooted in a continued mission to protect American’s most vulnerable citizens, Gandy added. With one out of every five seniors becoming victims of financial fraud, “it is imperative protections are put into place and strengthened to ensure these investors in the twilight of their years are afforded the proper protections.”

Financial exploitation is a growing threat to seniors and other vulnerable adults as fraudsters utilize increasingly sophisticated tactics. Financial professionals play a critical role in identifying potential red flags and protecting clients’ hard-earned savings.

The Financial Exploitation Prevention Act would permit firms and advisors to delay securities redemptions when they reasonably believe financial exploitation has occurred or is attempted against a senior citizen or an individual unable to protect their interests. The temporary delay can allow time to review suspicious activity, notify appropriate parties and help protect investors from potentially devastating financial harm.

The bill passed with a vote of 414-2. This is the second time it has passed the House with near unanimous support. The Financial Exploitation Prevention Act of 2023 passed the House 419-0.