With a rapidly expanding aging population, it is imperative to consider the way this growing demographic impacts business models and policy priorities. According to the US Census Bureau, by 2030 74% of the US population will be age 65 or older. With advancing age come cognitive changes ranging from aging brains, various forms of dementia, and the biggest concern of adults in America today, Alzheimer’s. As individuals advance in age, they become more vulnerable to fraudulent or predatory activity, particularly related to their financial security. According to the National Council on Aging, an estimated five million older Americans fall victim to abuse or exploitation each year, and many of those crimes go unreported. Financial crimes targeting seniors rob them of at least $2.6 billion annually.
Our Point of View
We are advocating for Federal and State Securities regulators to develop legislation to provide for protections against financial fraud. Current proposals include:
- Senior Safe Act — Senators Claire McCaskill (D-MO) and Susan Collins (R-ME) are the cosponsors and have reintroduced this legislation to the current Congress. The Act is intended to provide immunity from suit for certain individuals who disclose potential examples of financial exploitation of senior citizens, and for other purposes. The bill was referred to the Committee on Banking, Housing, and Urban Affairs on January 24, 2017.
- Elder Abuse Prevention and Prosecution Act — Senator Chuck Grassley (R-IA) reintroduced this legislation on January 20, 2017. The bill would expand data collection and information sharing to better prevent and respond to all forms of elder abuse and exploitation, including financial crimes against seniors. It would also increase training for federal investigators and prosecutors who handle cases of elder abuse and ensure that the Federal Trade Commission’s Bureau of Consumer Protection and the Justice Department will both have an elder justice coordinator. Additionally, the bill increases penalties for perpetrators of such crimes.
- FINRA — In February 2017, the SEC approved FINRA Rule 2165 (Financial Exploitation of Specified Adults) which would permit qualified individuals of firms to place temporary holds on disbursements of funds or securities from the accounts of clients where there is a reasonable belief that the individual is a possible victim of financial exploitation. The effective date of the rule is February 5, 2018.
- North American Security Administrators Association — A group of state securities professionals has drafted model language that can be used by states that choose to enact legislation to provide protection under state securities laws for financial services firms and professionals addressing potential privacy and delay in execution where elder fraud is suspected. To date, more than 13 states have proposed or enacted legislation and regulation based on the NASAA model.