Legislative Agenda

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Principle One

Expand and Strengthen
Protections for Senior Investors

  • Establish Senior Investor Protection Partnership Grant Program
  • Reduce Reliance on Payment Systems Most Conducive to Fraud
  • Diminished Capacity Legislation

Senior financial exploitation is a serious and growing societal issue. As America’s population ages at an unprecedented rate, older investors continue to be targeted by unscrupulous financial professionals and, in certain instances, family members or caregivers. Medical conditions that affect cognitive ability are also more prevalent among seniors. Meanwhile, more and more wealth is concentrated in the hands of seniors. These trends all contribute to the unfortunate acceleration of senior financial fraud.

State securities regulators are on the frontline of protecting investors through financial education and enforcement efforts. However, given the factors noted above, we believe that a collaborative approach is needed to address the unique challenges that come with preventing and addressing financial exploitation and fraud perpetrated against senior investors. Congress should explore ways in which state and federal regulators and law enforcement can coordinate on initiatives to expose scam artists and protect vulnerable seniors and older Americans.

Establish Senior Investor Protection Partnership Grant Program

State securities regulators are well positioned to partner with local and national businesses, senior organizations, and law enforcement agencies to identify scams, fraud and exploitation occurring in their communities. Similarly, federal regulators and federal law enforcement agencies are well positioned to leverage resources on a national and international scale. Congress should investigate ways in which state and federal regulators and law enforcement agencies can combine resources, share information, and collaborate in new and innovative ways to prevent and combat elder financial exploitation.

State regulators have worked to form these partnerships through outreach to prosecutors, police units, other regulators, and adult protective service units. In some states, that outreach includes partnerships with banks, brokers, investment advisers, doctors, lawyers, and other service providers who may be able to identify senior exploitation. We encourage Congress to consider creating a grant program funded through the U.S. Department of Health and Human Services or other appropriate agency that would allow state regulators to deepen and accelerate those partnerships, to further investor education, and to better combat senior financial exploitation. We also note that Congress has recognized the acute need to enhance resources in this area, and enacted bipartisan legislation providing for precisely such grants, but that up to now such grants have not been funded.

Reduce Reliance on Payment Systems Most Conducive to Fraud

State securities regulators encourage Congress to explore methods to prevent the unauthorized theft of sensitive financial information from investors, particularly seniors or investors with diminished capacity. Some prepaid debit card companies have taken such steps, such as using an in-person swipe method to reload cards rather than the “PIN” method. We believe opportunities exist to prevent the flow of funds from investment portfolios of senior investors. We encourage Congress to explore and investigate those opportunities.

Diminished Capacity Legislation

State securities regulators are investigating legislative and regulatory changes that can address diminished capacity issues in the context of senior financial exploitation. With at least a third of its members’ enforcement actions involving senior investors, NASAA formed a Board-level committee dedicated to tackling the challenges confronting senior investors, regulators and securities industry professionals. The Committee on Senior Issues and Diminished Capacity, which is comprised of representatives from a broad cross-section of NASAA members, seeks to work with broker-dealer and investment adviser firms, as well as senior advocates, to develop regulatory, enforcement, and investor education initiatives to prevent the financial exploitation of seniors.

Addressing senior exploitation requires a holistic approach, and NASAA has formed an advisory council of experts from government, business, senior advocacy organizations, academia and medical and legal practitioners to ensure diverse input. We look forward to sharing the results of our investigation with Congress, and also encourage Congress to reexamine the Gramm-Leach-Bliley Act to ensure that important privacy provisions do not inadvertently allow scam artists to exploit investors with diminished capacity.

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