The Senate has unanimously approved a bill that would tighten rules governing sales of mutual funds and life insurance to members of the military, The New York Times reports.

Slightly different than a similar bill the House approved last summer, it is expected to be reconciled with that one and passed into law.

Congress began looking into abusive financial sales practices aimed at the military after The Times ran a series of articles in 2004 exposing high-pressure sales tactics and violations of rules governing solicitations on military bases. Financial companies also sold high-cost, unsuitable products with misleading information to members of the armed forces.

The new law would abolish a type of mutual fund called a "contractual plan," which typically charge half of the first year's contributions as fees. It would also require sales agents to register with a central registry, give states more control over insurance sales and require the Department of Defense to report violations to licensing agencies. I would also limit interest rates on loans to 36%.

The House bill goes even further, by banning companies from making threats, appealing to commanding officers or automatically garnishing wages without consent.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.