WASHINGTON, D.C. — The House of Representatives passed the Financial Exploitation Prevention Act of 2025, or H.R. 2478, by a vote of 414-2. The bill has been sent to the Senate for consideration.

The proposed legislation would allow open-end funds and their transfer agents to temporarily suspend redemption requests from older adults or individuals with disabilities if financial exploitation is suspected. Open-end funds include mutual funds and most exchange-traded funds, while transfer agents manage shareholder records and transaction processing.

Under the act, an initial delay of up to 15 days on a suspected redemption request is permitted. An additional 10-day delay can be enacted if exploitation is determined to be involved. Longer delays are allowed with authorization from a court, state regulator, or other applicable authority.

Representative Ann Wagner, a Republican from Missouri and a lead sponsor of the bill, stated that the measure provides an extra layer of defense against fraud. "Many seniors and vulnerable adults need that extra layer of defense from fraud that has become tragically common in today's world, and [this bill] is a commonsense step to protecting parents, grandparents, and families in communities around our country," Wagner said. The bill also requires investment companies to ask customers to provide a 'trusted contact' who can be notified in certain situations, although participation in this program is not mandatory for the companies.

The act mandates the Securities and Exchange Commission to deliver a report to Congress within one year. This report would focus on regulatory and legislative policies aimed at reducing financial fraud among vulnerable adults. A companion bill, S. 2840, is currently awaiting action in the Senate Banking Committee. A previous version of this legislation passed the House in 2023 with a vote of 419-0 but later expired when the Senate did not act on it.

Reported scams affecting adults aged 60 and older reached $2.4 billion in 2024, according to the Federal Trade Commission. This figure represents a 26.3% increase from the $1.9 billion reported in 2023 and is 300% more than the $600 million reported in 2020. Investment scams accounted for the bulk of these losses in 2024, with individual losses of $100,000 or more making up $1.6 billion, or 68%, of the total reported losses for this demographic in 2024.

Jeff Carpenter, CEO of Weokie Federal Credit Union, commented on the importance of pausing suspicious transactions. "Whenever there's a sense of urgency you have to pause," Carpenter said. He added, "Pausing is the most important thing. If they can create a sense of urgency and get you to move the money quickly, it could be hard to get it back."