New Federal Bill Would Protect Against Elder Financial Fraud: Until It Passes, Here's What States Are Doing to Help
Key Points
As federal lawmakers attempt to protect Americans from investment fraud, at least 33 states now have protections in place designed to help shield them from bank-related fraud.
States have authorized banks and credit unions to temporarily freeze suspicious transactions when elder exploitation is suspected.
Increasingly, laws permit or require reports to law enforcement and Adult Protective Services when financial exploitation is suspected.
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While it's true that anyone can fall victim to financial fraud, the issue has become particularly critical for seniors. In 2025, online scams alone cost older Americans $7.748 billion, a startling 59% year-over-year jump from 2024.
As you prepare for retirement, you never expect someone to slip in and steal your hard-earned savings. And yet, it happens to even the most prepared retiree. For example, there were $1 billion in tech support scams, $584 million in romance scams, and $568 million in business email scams in 2025. The greatest losses, though, were due to investment fraud, with seniors losing at least $3.5 billion.
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Congressional action
On June 25, 2026, the House of Representatives passed the Financial Exploitation Prevention Act to better protect older Americans and vulnerable adults from investment fraud. If it passes the Senate and President Trump signs it into law, the bill would give financial companies a new tool to curb fraud.
These companies will be able to temporarily stop securities redemptions when financial abuse is suspected. The measure allows firms to delay redemptions by up to 15 days (plus a potential 10-day extension) if they suspect suspicious transactions involving seniors or vulnerable adults.
Let's say your parent or grandparent has $50,000 in a mutual fund, and a new online friend has convinced them to cash it out, wire the money to them, and invest it in cryptocurrency. If that were to happen today, the investment firm or financial institution your relative works with might suspect fraud but would have no legal way to protect them. If passed, this new bill would give them the authority to intervene when there are clear signs of financial exploitation.
States play an important role
As the bill works its way through the Senate, 33 states already have laws on the books to protect seniors and vulnerable adults from banking-related fraud. These laws may not yet give investment firms the authority they need to protect all clients, but they do reflect what legislators are doing at the state level.
Here's a look at the 33 states that have taken the first step by protecting older and vulnerable constituents from banking-related fraud:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Idaho
- Kentucky
- Louisiana
- Maine
- Maryland
- Michigan
- Minnesota
- Mississippi
- Montana
- Nebraska
- Nevada
- New Hampshire
- North Carolina
- North Dakota
- Oklahoma
- Oregon
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Wyoming
Rules vary by state. For example, one state may require a bank to report suspected fraud to both law enforcement and Adult Protective Services, while another state may not. One may allow a bank to hold a transaction for 10 days, while another allows 15.
In a world in which fraud of all sorts -- including Social Security scams -- has become the norm, it pays to be aware. To learn more about the steps that have been taken to protect you or someone you care about from fraud, give your bank a call and ask about their suspected fraud practices.
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