LANSING, Mich. — Sen. Jim Runestad’s legislation to help protect vulnerable adults from financial exploitation was given approval Wednesday by the House Financial Services Committee.
“One of the most important duties I have as an elected leader is working to protect Michigan’s most vulnerable residents, and this bill will make a difference by empowering certain financial advisors and brokers to stop exploitation before it occurs,” said Runestad, R-White Lake. “Sadly, the financial exploitation of vulnerable adults has become an all-too-common crime. This often happens without the victim’s knowledge and is perpetrated by someone they trust or who has been appointed to protect them. As a result, it often goes unreported and undetected until serious consequences surface.”
Senate Bill 315, which was unanimously approved by the Senate last year, would provide clarity in Michigan law to allow financial advisors and broker-dealers to place a hold on disbursements from a specified adult’s account if they suspect financial exploitation is taking place or will take place. The bill would also establish specific procedures to be followed and limit the initial hold up to 15 days, which could be extended if warranted after further review of the facts.
“While the goal of this legislation is to stop exploitation, it also includes a number of necessary provisions to balance the priority of protecting vulnerable residents and their need to have access to resources for food, housing and other services,” Runestad said.
Specified adults under the bill include people age 65 or older and adults age 18 or older who have a mental or physical impairment that makes them unable to protect their own interests.
According to an “Elder Financial Exploitation” report by the U.S. Securities and Exchange Commission, the majority of incidents of elder financial exploitation go unreported to authorities. The same report said some studies have found elder financial exploitation is emerging as the most prevalent form of elder abuse.
“Unfortunately, exploitation of vulnerable adults is becoming all too problematic today. This legislation will give financial service professionals an important tool to work with the appropriate regulatory agencies to protect the customers we serve,” said Chuck May of the National Association of Insurance & Financial Advisors – Michigan.
The bill now moves to the full House for consideration.