House Passes Bill to Fund State Efforts to Protect Older Investors

 Commentary  May 12, 2022 at 07:44 AM  Share & Print

 

The full House passed by vote a 370-48 late Wednesday H.R. 5914, the Empowering States to Protect Seniors from Bad Actors Act, bipartisan legislation to create a grant program, implemented by the Securities and Exchange Commission, that would work closely with state securities regulators to protect older investors.

The bill would move the responsibility for administering the Senior Investor Protection Grant Program established by Section 989A of the Dodd-Frank Wall Street Reform and Consumer Protection Act from the Consumer Financial Protection Bureau to the SEC.

“Uncertainty around the CFPB’s funding authority has sidelined the program for more than a decade,”.

The bill would also establish an interdivisional task force within the SEC to review grant applications and oversee the administration of the program.

It would authorize $10 million annually in spending for fiscal years 2023 to 2028.

State securities regulators and state insurance regulators will be eligible for the grants. The amount of grant funding that could be awarded to any single “eligible entity” would be capped at $500,000.

Melanie Senter Lubin, Maryland securities commissioner and president of the North American Securities Administrators Association, told House Speaker Nancy Pelosi on Monday in a letter that passage of the bill would “place the interests of investors front-and-center.”

The grant program would “enhance existing efforts by state securities and insurance regulators to protect senior investors and policyholders from financial fraud,” NASAA explained.

Lubin said the bill would also “create more opportunities for federal and state securities regulators to communicate and coordinate in their efforts to protect senior investors.”

The House also passed late Wednesday The Small Business Mergers, Acquisitions, Sales, and Brokerage Act, H.R. 935, which codifies an administrative action by the SEC that exempts certain merger-and-acquisition brokers from securities registration requirements. The bill passed by a vote of 419-0.

The exemption does not apply to certain brokers, including those that provide financing related to the transfer of ownership, engage on behalf of any party in a transaction involving specified shell companies, or are subject to suspension or revocation of registration.


European Compliance Association

European Compliance Association

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