Financial Exploitation Prevention Act of 2025

This bill would allow mutual funds and their agents to delay the redemption of securities if they reasonably believe an older adult or an individual with certain impairments is being financially exploited. Under these procedures, a company could initially pause a transaction for up to 15 days, with the possibility of further extensions if exploitation is confirmed or if a court or regulator intervenes. The proposal also requires companies to notify the Securities and Exchange Commission when using these delay procedures and directs the agency to provide recommendations for preventing the financial exploitation of vulnerable adults.

This bill affects individuals aged 65 or older and adults aged 18 or older who have mental or physical impairments that prevent them from protecting their own interests. It also impacts open-end investment management companies, such as mutual fund providers, and the transfer agents who service their securities. Additionally, the Securities and Exchange Commission and state regulators are affected by new notification and oversight responsibilities regarding delayed security redemptions.

• Authorization to delay security redemptions. Open-end investment management companies and transfer agents may delay the redemption of securities if they reasonably believe the transaction involves the financial exploitation of an adult age 65 or older or an adult with a mental or physical impairment.
• Established timeframes for redemption delays. Companies may initially delay a redemption for up to 15 days, with an optional 10-day extension if exploitation is confirmed. Further extensions may be granted by state regulators, administrative agencies, or courts.
• Asset management and notification requirements. During a delay, companies must hold the redemption amounts in a demand deposit account and fulfill specific notification requirements. Entities choosing to follow these procedures must notify the Securities and Exchange Commission (SEC).
• SEC recommendations on financial exploitation. The bill mandates that the Securities and Exchange Commission develop recommendations to address the financial exploitation of older adults and individuals with impairments.

• H.R. 2478, Financial Exploitation Prevention Act of 2025
  Apr 8, 2026 · As reported by the House Committee on Financial Services on November 4, 2025

The bill establishes new procedures for open-end investment management companies and transfer agents to delay security redemptions, while requiring these entities to notify the Securities and Exchange Commission (SEC) if they elect to comply with these standards.

The bill aims to prevent the financial exploitation of adults aged 65 and older, as well as individuals with mental or physical impairments, by establishing procedures for investment companies to delay the redemption of certain securities when exploitation is suspected.