Between the budget, bathrooms and other high profile bills, there wasn’t much oxygen left this past legislative session. Despite that, some important consumer protections passed that you should know about.
On September 1, one of the most significant of these protections takes effect: The Elder Financial Protection Law sets new standards to combat financial scams and abuse. It enables others, including financial advisors, to step forward to protect seniors when they see something is amiss.
September is also National Life Insurance Awareness Month, when the financial industry takes a little extra time to focus on the importance of planning to protect our loved ones. That and the new law go hand-in-hand.
The Elder Financial Protection Act is a response to an alarming increase in the financial abuse of older victims spotted by financial professionals and lawmakers. With people age 50 or older controlling more than 70 percent of the nation’s wealth, today’s scammers are more sophisticated than ever before.
It’s difficult for even the savviest to identify the more sophisticated scams. Financial advisors are often the first to see the warning signs as life savings begin to drain away. Until now, there was little they could do to act.
With the strong support of the National Association of Insurance and Financial Advisors – Texas membership (NAIFA-Texas), lawmakers passed and Gov. Greg Abbott signed the Elder Financial Protection Act. Its provisions include:
- Defining financial exploitation, which was undefined under Texas law.
- Providing banks, stockbrokers and other financial advisors the option to contact local law enforcement.
- Allowing financial institutions to place a 10-day hold on an account once a report is made to law enforcement or the Texas Department of Family Protective Services.
- Allowing a financial advisor or institution to contact a trusted third party if they suspect financial exploitation — as long as the third party isn’t the suspect party.
With this new law, financial advisors accredited by national organizations like NAIFA become the first line of defense against the scammers. Those advisors have an objective perspective of an individual’s financial condition and can see the early signs of financial abuse. Now they can act in their client’s best interest and intervene.
It’s a powerful piece of legislation that puts Texas in the forefront of protecting all of its citizens – especially the most vulnerable.