A bipartisan group of senators on January 20, 2022, introduced legislation that would put the SEC in charge of a languishing Dodd-Frank Act senior investor protection grant program. Sec. 989A of PL111-203
The introduction of S. 3529, the Empowering States to Protect Seniors from Bad Actors Act, comes months after the House Financial Services Committee advanced its own version of the measure (H.R. 5914) by voice vote. (See House Financial Services Committee Advances SPAC Reforms in the November 17, 2021, edition of Accounting & Compliance Alert.)
Sen. Chris Van Hollen, a Maryland Democrat, sponsored the bill, with Democratic Sen. Raphael Warnock of Georgia and Republicans Sens. Tim Scott of South Carolina and Cynthia Lummis of Wyoming joining as cosponsors.
The bill addresses Dodd-Frank Section 989A, which directed the Consumer Financial Protection Bureau (CFPB) to establish a grant program that would provide financial support to states to protect seniors from financial fraud. But uncertainty around the CFPB’s funding authority has sidelined the program for more than a decade.
S. 3529 would shift oversight of the program to a newly established SEC interdivisional task force and give the commission authority to dole out $10 million per year in grants to state insurance and securities regulators through fiscal 2028.
Under the bill, the chair of the task force would be appointed by the chair of the SEC in consultation with the other commissioners, and may come from the Office of the Investor Advocate, Division of Enforcement, or other SEC unit as deemed appropriate. Among other uses, states would be allowed to use the grants of up to $500,000 to hire staff to investigate and prosecute senior financial fraud; fund technology, equipment, and training for regulators, prosecutors, and law enforcement; and provide training and educational materials to seniors to increase their awareness of financial fraud.
Van Hollen, in a statement, called the measure “critical legislation to help combat fraudulent scams aimed at older Americans.”
“I look forward to working with my colleagues to get this common-sense bill passed,” he said.
The bill has broad support among investor protection advocates, state securities regulators, advocates for seniors, and others. The Consumer Federation of America, in a November 2021 letter in support of the House bill, wrote that it “will fix the legislative and structural gremlins in [Dodd-Frank] Sec. 989A by assigning responsibility for the administration of the grant program to the SEC.”
Rep. Josh Gottheimer, a New Jersey Democrat, sponsored the House bill.
This article originally appeared in the January 25, 2022 edition of Accounting & Compliance Alert, available on Checkpoint.
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