Financial Exploitation Prevention Act of 2025

Key Points

• Lets mutual funds and their transfer agents delay paying out a redemption (a cash-out) when they reasonably suspect financial exploitation.
• Applies to people 65 and older, and to adults 18+ who the fund/agent reasonably believes have an impairment that makes them unable to protect their interests.
• If a delay is used, the payout can be held up to 15 business days, with a possible extra 10 business days after certain steps, and it can be extended further by a state regulator or court.
• For direct-at-fund accounts, the fund/agent must ask for at least one trusted contact person and tell the customer they may contact that person if exploitation is suspected or to confirm the customer’s status.
• Requires internal procedures, recordkeeping, and disclosures in fund documents, and directs the SEC to send Congress recommendations within 1 year after the law takes effect.