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Federal Regulators Issue Guidance on Reporting Financial Abuse of Older Adults
Wednesday, September 25, 2013 6:45 AM

Seven federal regulatory agencies, including the National Credit Union Administration, have issued guidance to clarify that the privacy provisions of the Gramm-Leach-Bliley Act generally permit financial institutions to report suspected elder financial abuse to appropriate authorities.

The Gramm-Leach-Bliley Act generally requires that a financial institution notify consumers and give them an opportunity to opt out before providing nonpublic personal information to a third party. The guidance clarifies that it is generally acceptable under the law for financial institutions to report suspected elder financial abuse to appropriate local, state or federal agencies.

Older adults can be attractive targets for financial exploitation and may be taken advantage of by scam artists, financial advisors, family members, caregivers, or home repair contractors. Recent studies suggest that financial exploitation is the most common form of elder abuse and that only a small fraction of incidents is reported. Older adults often are targeted because they have retirement savings, accumulated home equity, or other assets. They also are more likely to experience cognitive decline, which can impair their capacity to recognize financial exploitation and scams.

Employees of financial institutions may be able to spot irregular transactions, account activity, or behavior that signals financial abuse. They can play a key role in preventing and detecting elder financial exploitation by reporting suspicious activities to the proper authorities.

Click here to view the interagency guidance.

The NCUA has issued a letter to credit unions on the subject matter, and NCUA Chairman Debbie Matz strongly encourages credit union directors and CEOs to make sure staff members are trained to spot cases in which older members are victims of financial abuse or exploitation. Credit unions should also be sure there are policies and procedures in place to allow reporting of these cases in accordance with the law.

The Letter to Credit Unions is available on NCUA’s website here.

Additionally, the Cornerstone Credit Union League and its REAL Solutions program have joined forces to develop an initiative to promote awareness of elder financial abuse and exploitation (EFAE) in the financial services industry.

The National Center for Elder Abuse defines elder financial exploitation as “the illegal or improper use of an elder’s funds, property, or assets.” Because seniors are more likely to have more money in their accounts, they are especially vulnerable to exploitation by unscrupulous caregivers, family members, friends, or people with whom the elder conducts business.

Credit unions can learn more about this initiative by visiting the Elder Financial Abuse Awareness page.