The Wall Street Reform and Consumer Protection Act of 2009 that passed the House earlier this month, contains a provision that calls on the Securities and Exchange Commission (SEC) to provide grants for states to investigate and prosecute misleading and fraudulent marketing practices.
HR 4173 also allows those grants to be used to develop educational materials and training aimed at reducing misleading and fraudulent marketing of financial products toward seniors.
The grants, of no more than $500,000 per state per fiscal year, can be used for a number of things. These include:
(1) to fund additional staff to identify, investigate, and prosecute (through civil, administrative, or criminal enforcement actions) cases involving misleading or fraudulent marketing of financial products to seniors;
(2) to fund technology, equipment, and training for regulators, prosecutors, and law enforcement in order to identify salespersons and advisers who target seniors through the use of misleading designations;
(3) to fund technology, equipment, and training for prosecutors to increase the successful prosecution of those targeting seniors with the use of misleading designations;
(4) to provide educational materials and training to regulators on the appropriateness of the use of designations by salespersons and advisers of financial products;
(5) to provide educational materials and training to seniors to increase their awareness and understanding of designations; and
(6) to develop comprehensive plans to combat misleading or fraudulent marketing of financial products to seniors.
The bill would allocate $8 million dollars each fiscal year between 2011 and 2015.
HR 4173 also includes an amendment which requires the new Consumer Financial Protection Agency (CFPA) to oversee the reverse mortgage industry to ensure seniors are not exposed to unfair and deceptive practices.
The bill still needs to pass the Senate before it becomes law.
Write to Reva Minkoff