Should an SEC Task Force Study Financial Crimes Against Seniors? (H.R. 1876)

What is H.R. 1876?

(Updated May 22, 2019)

This bill — the Senior Security Act of 2019 — would create a Senior Investor Taskforce at the Securities and Exchange Commission (SEC) that would examine and identify challenges facing senior investors. This interdivisional task force would be comprised of staff from the Division of Enforcement, Office of Compliance, Inspections and Examinations, and Office of Investor Education and Advocacy. The task force, in consultation with other SEC offices, state securities and law enforcement authorities, state insurance regulators, and federal agencies, would report its findings to Congress every two years and recommend any regulatory or statutory changes.

Further, within one year of this bill’s enactment, the U.S. Government Accountability Office (GAO) would be required to study and report on the economic costs of the financial exploitation of senior citizens.

Argument in favor

Financial crimes against senior citizens are on the rise. A better understanding of how these crimes are committed will help the government and financial institutions better protect vulnerable seniors from those looking to defraud or otherwise exploit them.

Argument opposed

Financial institutions, not the federal government, are best positioned to understand and combat financial crimes against seniors. It’s a waste of the government’s money to study this issue at the SEC when financial institutions are best able to investigate and prevent these crimes.

Impact

Senior citizens; financial crimes against senior citizens; the SEC; state securities and law enforcement authorities; states insurance regulators; and the GAO.

Cost of H.R. 1876

Last Congress, the CBO estimated that implementing this bill would have a gross cost of $7 million over the 2019-2023 period for the SEC to establish and carry out the taskforce’s functions as established under this bill and less than $500,000 for the GAO to conduct a study on the economic cost of senior citizens’ financial exploitation. However, since the SEC is authorized to collect fees to offset its annual appropriation, the CBO estimates that the net effect on discretionary spending would be negligible, assuming appropriation actions consistent with that authority.

Additional Info

In-Depth: Rep. Josh Gottheimer (D-NJ) reintroduced this bill from the 115th Congress to create an interdivisional task force at the Securities and Exchange Commission (SEC) to strengthen protections and safeguards for senior citizens against financial crimes and scammers. When he introduced this bill last Congress as part of his Three-Part Senior Security Strategy. After this bill passed the House as part of the JOBS And Investor Confidence Act of 2018 legislative package, Rep. Gottheimer said:

“Since I took office, I have been committed to helping seniors save their hard-earned money for retirement, so they can afford to stay in New Jersey and enjoy their lives with their kids and grandkids. The bipartisan Senior Security Act will stop financial predators from scamming seniors out of their savings.”

The Securities Industry and Financial Markets Association (SIFMA), an industry trade group representing securities firms, banks, and asset management companies, expressed its support for this bill in the 115th Congress. In a press release, SIFMA stated:

“Protecting senior investors from financial exploitation and the dangers of cognitive decline is a top priority for SIFMA. We strongly support any efforts that focus on the most immediate and most damaging dangers faced by senior investors. H.R. 6323 will strengthen efforts to protect these investors from those bad actors closest to them. Additionally, the bill requires the GAO to conduct a study on the economic costs of the financial exploitation of elder investors. The lack of good, recent data on senior financial exploitation is a problem that this legislation would significantly aid in resolving. SIFMA appreciates the bipartisan attention paid to this important issue.”

This bill has one cosponsor in the 116th Congress, Rep. Trey Hollingsworth (R-IN). In the 115th Congress, this bill had two bipartisan cosponsors (one Democrat and one Republican) and was included in the JOBS and Investor Confidence Act of 2018 (also referred to as the JOBS Act 3.0), which passed the House by a 406-4 vote but didn’t receive a Senate floor vote. A Senate version of this bill, sponsored by Sen. Joe Donnelly (D-IN) with one cosponsor, Sen. Dean Heller (R-NV), didn’t see any committee action in the 115th Congress.

Of Note: A 2015 report found that older Americans lose approximately $36.5 billion a year to financial scams and abuse; and those numbers are increasing as technology makes it easier for scammers to target older Americans. In 2016, a survey by the Investor Protection Trust found that nearly one in five seniors — approximately seven million Americans — have reported being victims of exploitation. In 2018, U.S. banks reported a record 24,454 cases of suspected elder financial abuse to the Treasury Department — more than double the number of suspected cases five years earlier.

Media:

• Sponsoring Rep. Josh Gottheimer Press Release (115th Congress)
  
• CBO Cost Estimate (115th Congress)
  
• SIFMA Press Release (In Favor, 115th Congress)
  
• SIFMA Letter to House Financial Services Committee (In Favor, 115th Congress)
  
• The Wall Street Journal (Context)