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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
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.
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