Distinguished Professor of Law Nina Kohn spoke with PBS News Hour on new legislation under consideration, the Financial Exploitation Prevention Act. According to the story, the proposed legislation would give open-end investment companies, including mutual funds, the ability to pause redemption requests from people 65 and older or people with disabilities when the institution believes financial fraud or exploitation is at play.
“Financial exploitation is a huge problem in this country,” said Kohn. “The concern is, in part, that individuals may lose their life savings. Financial institutions and entities that are holding individuals’ money can be empowered to help put the brakes on scams by delaying disbursement to a suspected victim.”
Kohn notes that a concern about the legislation is that it interferes with self-determination. “Allowing financial institutions to stop customers from accessing their own money may verge into limiting people’s ability to make choices about their lives and their own funds,” Kohn said.
She also points out that if financial holds are good for people over 65 and people with disabilities, why not make it universal across all people? “I think that speaks to our willingness as a society to curtail the self-determination and financial independence of older adults and people with disabilities to a degree that we are not comfortable curtailing the self-determination and financial independence of other adults,” she said.