House OKs bill to pause redemptions in suspected elder fraud

The U.S. House on June 25 passed the Financial Exploitation Prevention Act of 2025 by a vote of 414 to 2. The bill allows agents and investment firms to place temporary holds on redemptions of certain securities when they suspect financial exploitation.

Under the measure, an initial hold may last up to 15 days. If an investigation finds evidence of exploitation, firms may extend the hold for an additional 10 days to allow further review or protective steps. The provision applies to investors age 65 or older and to those with a mental or physical impairment.

The legislation requires firms to notify investors and certain parties when a hold is imposed. It also directs the Securities and Exchange Commission to issue recommendations on addressing exploitation of older adults and people with impairments.

Republican Rep. Ann Wagner of Missouri sponsored the bill. Democratic Rep. Josh Gottheimer of New Jersey and Republican Reps. Andrew Garbarino of New York and Bryan Steil of Wisconsin are co-sponsors. The measure now moves to the Senate for consideration.

Trade groups representing asset managers, retirement providers and independent advisers supported the bill. In a June 15 letter, Insured Retirement Institute officials Paul Richman and John B. Jennings wrote that a short window to investigate suspected abuse can protect retirement savings from rapid losses.

The Financial Services Institute highlighted that financial advisers often detect suspicious activity and noted the bill would give mutual funds tools to protect vulnerable clients while including safeguards. The Investment Company Institute cited research estimating one in five Americans over age 65 has been a victim of financial exploitation, with losses of about $2.9 billion, and urged prompt Senate action.

A similar measure passed the House unanimously in January 2023 but did not receive a Senate vote. Advocates and industry groups are pressing the Senate to act so firms can use standardized procedures to respond to suspected elder financial abuse.

If the Senate approves the bill, firms would have a statutory framework to pause certain transactions while alerts are investigated and the SEC would be expected to provide guidance and recommendations for broader protections.