Removing Barriers Blog

CFPB Issues Advisory and Report on Elder Abuse
Posted March 23, 2016 by CUNA Advocacy

Today, the CFPB released an advisory and a report with recommendations for financial institutions on how to prevent, recognize, report, and respond to financial exploitation of older Americans, which costs seniors billions of dollars per year. The advisory includes some best practices to help financial institutions prevent or halt the financial abuse of seniors. The recommendations are specific and actionable, although they are not binding regulations. The accompanying report provides a look at financial exploitation, case scenarios, and recommendations to prevent and respond quickly to abuse.

This is the first time a federal regulator has provided best practices to assist financial institutions in fighting elder abuse. The Bureau collaborated with seven other financial regulators three years ago to clarify that financial institutions generally are able to report suspected financial abuse of older adults to the appropriate authorities without violating any privacy provisions in the federal banking laws.

The advisory includes materials to train staff on detecting and preventing elder abuse, and encourages the use of fraud detection technologies to help spot warning signs, which may differ from conventionally accepted patterns of suspicious activity. The advisory clearly states that financial institutions can and should promptly report abuse to the relevant federal, state, and local authorities.

It also recommends protections, such as informing members about how to plan for incapacity, offering account features such as opt-in limits on cash withdrawals or geographic transactions, and providing alerts for specific account activity. Financial institutions can also enable older consumers to consent in advance to having their information be shared with a trusted relative or friend when the consumer appears to be at risk.

The Bureau acknowledged that many institutions are already taking some of the steps included in the advisory, or are considering other ways to protect their senior members. A few months ago, CUNA’s Consumer Protection Subcommittee discussed some of the challenges faced by credit unions in this area and the tension between privacy laws and reporting duties. A bill recently introduced in the Senate by Senator Susan Collins, which is supported by CUNA, would provide legal immunity when reporting elder abuse is in part to further address some of those issues.