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Responsible reporting of elder financial abuse

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WASHINGTON (8/3/12)—While reporting laws differ from state to state, this month's edition of Credit Union Magazine noted that many states are passing laws targeting elder financial abuse and there is a growing trend toward requiring mandatory reporting of possible elder financial abuse cases.

Fairfax, Va. law partners David Reed and Bruce Jolly in their Credit Union Magazine article outlined some of the steps credit unions can take to help them identify instances of elder financial abuse and report them to the proper authorities.

Potential signs of elder financial abuse can include large ATM withdrawals, debit transactions that are not consistent with a customer or member's normal activities, and sudden non-sufficient fund activity. Credit unions and other financial service providers should also be aware of caregivers that take a sudden interest in a senior citizen's financial activities, caregivers that attempt to speak for the senior citizen, or caregivers that refuse to leave a senior citizen's side when they are discussing financial matters.

Reed and Jolly noted that Maryland law requires financial institution employees that have observed potential elder financial abuse to file a report with that state's office of adult protective services or law enforcement agencies. However, Virginia law is more permissive, merely stating that employees that observe potential abuse may report the incident to state authorities.

Reports should include basic information on the accountholder and the individual that is suspected of abuse, and details on the nature of the abuse. Credit unions can base their elder financial abuse reporting programs on their existing Bank Secrecy Act and Identity Theft Red Flag compliance programs, the article said.

Reporting forms can be developed independently, or based on existing state reporting forms. Credit unions should also identify who on their staff is responsible for identifying possible elder financial abuse incidents, who will report those incidents, and who will have access to any filed reports.

Some states require staff to be trained in elder financial abuse detection and prevention. The Credit Union Magazine article suggested that credit unions could first focus on complying with state training requirements, and then expand the scope of their training as needed.

Credit union employees that file elder abuse reports are protected from legal retaliation in many states, the article noted.

Recent Consumer Financial Protection Bureau (CFPB) efforts to address elder financial abuse were also addressed in the article. That agency has asked for information on any resources that are provided to help seniors vet financial advisors and planners they may hire. Information on how financial education, financial counseling and management programs can be tailored to meet the needs of senior citizens and those that care for them has also been requested by the CFPB.

Around $2.9 billion was stolen from financially exploited senior citizens in 2010, according to CFPB estimates. Reported instances of financial theft from seniors grew by 12% between 2008 and 2010, the agency said.

Inside Washington (08/02/2012)

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  • WASHINGTON (8/3/12)--In a letter to acting Federal Home Finance Director Edward DeMarco, Senate Banking Committee Chairman Tim Johnson requested that the agency "rerun" its analysis for principal reductions on Fannie Mae and Freddie Mac loans. On Tuesday, Demarco issued a memo to Johnson indicating he would not allow Fannie and Freddie to offer principal reductions to troubled borrowers, despite the Obama administration's support for such programs. "I request that you rerun your analysis to take into account the issues raised in the memo," Johnson wrote in his letter. "It is important that we look at all relevant analyses and facts presented to make the best decisions on how to help homeowners and protect taxpayers" …
  • WASHINGTON (8/3/12)--The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Thursday announced that the deadline for submitting requests for the independent foreclosure review has been extended to Dec. 31. Borrowers seeking a review of their mortgage foreclosures under the federal banking agencies' Independent Foreclosure Review will have additional time to request a review if they believe they suffered financial injury as a result of errors in foreclosure actions on their homes in 2009 or 2010 by one of the servicers covered by enforcement actions issued in April 2011. As part of those enforcement actions, the agencies required 14 large mortgage servicers to retain independent consultants to conduct a comprehensive review of foreclosure activity in 2009 and 2010 to identify borrowers who may have been financially injured due to errors, misrepresentations, or other deficiencies in the foreclosure process. If the review finds that financial injury occurred, the borrower may receive remediation such as lump-sum payments, suspension or rescission of a foreclosure, a loan modification or other loss mitigation assistance, correction of credit reports, or correction of deficiency amounts and records …

iCompBlog Wrap-Upi reports on NCUA exam news more

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WASHINGTON (8/3/12)---In this month's edition of the Credit Union National Association's (CUNA) CompBlog Wrap-Up, CUNA Senior Vice President for Compliance Kathy Thompson takes note of the many recent National Credit Union Administration (NCUA) "announcements and pronouncements" that will affect credit union examinations.

As the CompBlog Wrap-Up notes, the NCUA has recently addressed:

  • Multi-featured open-end lending;
  • Servicemembers Civil Relief Act compliance concerns;
  • Fair lending exams;
  • Interest rate risk regulation;
  • Emergency liquidity sources; and
  • Small federal credit union examination programs.
The agency has also announced the development of a new Office of National Examination and Supervision, which will begin its work in January.

The August Wrap-Up also offers several compliance Q&As, reviews the new U.S. Internal Revenue Service reporting rule for nonresident aliens and highlights some common signs of elder financial abuse.

And as it does every month, the CompBlog Wrap-Up lists the upcoming effective dates of new regulations, important compliance articles and reports to read, as well as CUNA training programs.

For more of the CUNA CompBlog Wrap-Up, and other compliance gems, use the resource links.

Cybersecurity bill stalls out in Senate

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WASHINGTON (8/3/12)--The Cybersecurity Act of 2012 (S. 3414) Thursday did not get the votes it needed in the U.S. Senate to move the bill on its way to a final vote.

Sixty votes were necessary for lawmakers to invoke "cloture," a parliamentary procedure that means to close debate on a bill and move it to a vote.

A total of 52 senators agreed to hold a vote, while 46 opposed moving the bill forward.

S. 3414 would have established voluntary information protection standards for government agencies, utilities, and other public and private entities. The bill would also establish a National Cybersecurity Council, which would include appointed representatives from the Department of Commerce, Department of Defense, Department of Justice, the intelligence community, and various "sector-specific" federal agencies.

Congress is set to adjourn today for the traditional August recess and lawmakers are scheduled to return in early September. The bill could be brought up for a vote again once Congress returns.

The Credit Union National Association (CUNA) monitored the bill's progress, noting that some voluntary security standards could eventually become mandatory, thus imposing a new burden on financial institutions.

CUNA has repeatedly said that the data security standards followed by credit unions and other financial institutions are strong, and it remains committed to ensuring that any data security measure passed by Congress does not negatively impact credit unions.