A proposal unveiled by U.S. state securities regulators on Tuesday could lead to more uniform state laws aimed at protecting seniors, people with dementia and other vulnerable adults from financial exploitation.
The plan by the North American Securities Administrators Association (NASAA), would establish a model law whose provisions would include allowing firms to temporarily hold off on disbursing funds or securities when they suspect potential financial abuse.
NASAA, a group of securities regulators from U.S. states, Canada and Mexico, expects to have a final version in place by year-end, said Judith Shaw, who became NASAA's president on Tuesday. Shaw, who is also Securities Administrator at Maine's Department of Professional and Financial Regulation, unveiled the plan at the group's annual meeting.
The group is requesting input from the public and financial advisory industry about the proposal through Oct. 29.
The plan follows efforts by some U.S. states that have already adopted or are considering similar measures. On June 12, Missouri became the third state to enact a law to protect senior citizens from scams and other types of financial exploitation. Washington and Delaware also have similar laws.
More than five million Americans over the age of 65, or 1.5 percent of the U.S. population, have Alzheimer's disease, the most common form of dementia, according to the Chicago-based Alzheimer's Association. That could balloon to 7.1 million by 2025.
These people can become easy targets for scams. U.S. seniors lose as much as $2.6 billion per year to financial exploitation, according to the Securities Industry and Financial Markets Association, a trade group.
A model law, which state legislators could choose to adopt, would lead to more uniformity, Shaw said in an interview.
Brokerages and investment advisory firms could then expect consistency when developing their procedures and programming software, Shaw said.
"They know they can follow the same process and procedures state by state in order to protect seniors," Shaw said.