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Congressional Daily Record
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June 24, 2026
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Download official House Record PDFReturn to issue contextMr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2478) to amend the Investment Company Act of 1940 to postpone the date of payment or satisfaction upon redemption of certain securities in the case of the financial exploitation of specified adults, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2478
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Financial Exploitation
Prevention Act of 2025”.
SEC. 2. REDEMPTION OF CERTAIN SECURITIES POSTPONED.
(a) In General.—Section 22 of the Investment Company Act
of 1940 (15 U.S.C. 80a-22) is amended by adding at the end
the following:
“(h) Requirements With Respect to Non-institutional Direct
At-fund Accounts.—
“(1) Election.—
“(A) In general.—A registered open-end investment company
and a transfer agent described under paragraph (2) may elect
to comply with the requirements under paragraph (2) and
subsection (i) by notifying the Commission of such election.
“(B) Effect of election.—Paragraph (2) and subsection (i)
shall only apply to a registered open-end investment company
and a transfer agent that have made the election under
subparagraph (A).
“(2) Requirements.—In the case of a customer who is a
holder of a non-institutional account held directly with a
registered open-end investment company and serviced by a
transfer agent (a `direct-at-fund account'), the company and
transfer agent shall—
“(A) request from such customer the name and contact
information of at least one individual who—
“(i) is at the time of such request an adult; and
“(ii) may be contacted with respect to such account;
“(B) document and retain the information received pursuant
to subparagraph (A); and
“(C) disclose to such customer in writing (including
through electronic delivery) that such company or transfer
agent may contact an individual specified pursuant to
subparagraph (A) with respect to the account of such customer
to—
“(i) address possible financial exploitation of such
customer;
“(ii) confirm the contact information or health status of
the customer; or
“(iii) identify any legal guardian, executor, trustee, or
holder of a power of attorney of the customer.
“(i) Redemption of Certain Securities Postponed.—
“(1) In general.—Notwithstanding subsection (e), a
registered open-end investment company or a transfer agent
acting on behalf of such company may postpone the date of
payment or satisfaction upon redemption of any redeemable
security in accordance with its terms for more than seven
days after the tender of such security to such company or its
agent designated for that purpose for redemption if such
company or agent reasonably believes that—
“(A) the redemption is requested by a security holder who
is a specified adult; and
“(B) financial exploitation has occurred, is occurring, or
has been attempted with respect to such redemption.
“(2) Duration.—
“(A) In general.—Except as provided in subparagraphs (B)
and (C), a registered open-end investment company or a
transfer agent acting on behalf of such company may postpone
the date of payment or satisfaction upon redemption of a
redeemable security under paragraph (1) for a period of not
more than 15 business days.
“(B) Extension upon determination of exploitation.—The
period described in subparagraph (A) may be extended by an
additional 10 business days if the registered open-end
investment company or a transfer agent acting on behalf of
such company—
“(i) reasonably believes that—
“(I) the redemption is requested by a security holder who
is a specified adult; and
“(II) financial exploitation has occurred, is occurring,
or has been attempted with respect to such redemption;
“(ii) subject to subparagraph (D), not later than 2 days
after making a determination under clause (i), notifies the
individuals specified by such security holder under
subsection (h)(2)(A) in writing (including through electronic
delivery) of the extension of the period described in
subparagraph (A) under this subparagraph and the reason for
such extension;
“(iii) initiates an internal review of the facts and
circumstances relating to the determination under clause (i);
“(iv) holds amounts related to the delayed payment or
satisfaction upon redemption of the redeemable security in a
demand deposit account; and
“(v) documents and retains records related to carrying out
clause (iv) and includes such records in the first required
account statement of the security holder provided after the
date on which the determination is made under clause (i).
“(C) Extension by government.—A State regulator,
administrative agency of competent jurisdiction, or court of
competent jurisdiction may extend the period described in
subparagraph (A).
“(D) Notification.—
“(i) Exception.—Subparagraph (B)(ii) shall not apply if a
registered open-end investment company or transfer agent
acting on behalf of such company reasonably believes that an
individual required to be notified under such subparagraph
is, has been, or will subject the security holder who
identified such individual under subsection (h)(2)(A) to
financial exploitation.
“(ii) Reasonable efforts.—An open-end investment company
or transfer agent acting on behalf of such company shall be
considered in compliance with subparagraph (B)(ii) if such
company or transfer agent makes a reasonable effort to
contact the individuals specified by a security holder under
subsection (h)(2)(A).
“(E) Internal procedures.—An open-end investment company
or transfer agent acting on behalf of such company shall
establish procedures to carry out the requirements under this
subsection, including procedures—
“(i) related to the identification and reporting of
matters related to the financial exploitation of specified
adults;
“(ii) to determine whether to release or reinvest delayed
redemption proceeds, taking into account the facts and
circumstances of each case, should the internal review under
subparagraph (B)(iii) support the reasonable belief described
in subparagraph (B)(i);
“(iii) identifying each employee of the company or
transfer agent with authority to establish, extend, or
terminate a period described in paragraph (1) or subparagraph
(A);
“(iv) in the case of a transfer agent, that are reasonably
designed to ensure that the employees of such transfer agent
comply with this subsection; and
“(v) in the case of an open-end investment company,
establishing periodic reporting requirements under which a
transfer agent acting on behalf of such company shall notify
such company of—
“(I) each extension under subparagraph (B) authorized by
such transfer agent;
“(II) each finding by the transfer agent under
subparagraph (B)(i);
“(III) each notification under subparagraph (B)(ii)
carried out by such transfer agent; and
“(IV) the results of each internal review initiated by the
transfer agent under subparagraph (B)(iii).
“(F) Information included in certain statements.—An open-
end investment company shall include in each prospectus or
statement of additional information a notification that the
company or transfer agent acting on behalf of such company
may postpone redemption of certain securities under this
subsection.
“(G) Record retention.—An open-end investment company or
transfer agent acting on behalf of such company shall—
“(i) document and retain records of—
“(I) each postponement of redemption under subparagraph
(A), (B), or (C);
“(II) each finding under subparagraph (B)(i);
“(III) the name and position of each employee described in
subparagraph (E)(iii);
“(IV) each notification carried out under subparagraph
(B)(ii); and
“(V) the results of each internal review initiated under
subparagraph (B)(iii); and
“(ii) make such records available to the Commission at the
request of the Commission.
“(3) Specified adult defined.—In this subsection, the
term `specified adult' means—
“(A) an individual age 65 or older; or
“(B) an individual age 18 or older who a registered open-
end investment company or a transfer agent acting on behalf
of such company reasonably believes has a mental or physical
impairment that renders the individual unable to protect the
individual's own interests.”.
(b) Regulatory and Legislative Recommendations.—
(1) In general.—Not later than 1 year after the date of
the enactment of this section, the Securities and Exchange
Commission, in consultation with the entities specified in
paragraph (2),
shall submit to Congress a report that includes
recommendations regarding the regulatory and legislative
changes necessary to address the financial exploitation of
security holders who are specified adults (as defined in
subsection (i)(3) of section 22 of the Investment Company Act
of 1940 (15 U.S.C. 80a-22), as added by this section).
(2) Consultation.—The entities specified in this paragraph
are as follows:
(A) The Commodity Futures Trading Commission.
(B) The Director of the Bureau of Consumer Financial
Protection.
(C) The Financial Industry Regulatory Authority.
(D) The North American Securities Administrators
Association.
(E) The Board of Governors of the Federal Reserve System.
(F) The Comptroller of the Currency.
(G) The Federal Deposit Insurance Corporation.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Arkansas (Mr. Hill) and the gentlewoman from California (Ms. Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.
General Leave
Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to extend their remarks and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I include in the Record the Congressional Budget Office estimate for this bill.
H.R. 2478,