I. INTRODUCTION
The federal banking agencies have issued guidance to financial institutions to clarify the applicability of privacy provisions of the Gramm-Leach-Bliley Act (GLBA) to reporting suspected financial exploitation of older adults.
The guidance clarifies that reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not, in general, violate the privacy provisions of the GLBA or its implementing regulations. In fact, specific privacy provisions of the GLBA and its implementing regulations permit the sharing of this type of information under appropriate circumstances without complying with notice and opt-out requirements.
Elder abuse includes the illegal or improper use of an older adult’s funds, property, or assets. Recent studies suggest that financial exploitation is the most common form of elder abuse and that only a small fraction of incidents are reported. Older adults can become targets of financial exploitation by family members, caregivers, scam artists, financial advisers, home repair contractors, fiduciaries (such as agents under power of attorney and guardians), and others. Older adults are attractive targets because they may have significant assets or equity in their homes. They may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, and/or the recent loss of a partner, family member, or friend.
Financial institutions can play a key role in preventing and detecting elder financial exploitation. A financial institution’s familiarity with older adults it encounters may enable it to spot irregular transactions, account activity, or behavior. Prompt reporting of suspected financial exploitation to adult protective services, law enforcement, and/or long-term care ombudsmen can trigger appropriate intervention, prevention of financial losses, and other remedies.
II. PRIVACY PROTECTIONS
The GLBA establishes a general rule that a financial institution may not disclose any nonpublic personal information about a consumer to any nonaffiliated third party unless the financial institution first provides the consumer with a notice that describes the disclosure (as well as other aspects of its privacy policies and practices) and a reasonable opportunity to opt out of the disclosure, and the consumer does not opt out. However, section 502(e) of the GLBA provides a variety of exceptions to this general rule that permit a financial institution to disclose information to nonaffiliated third parties without first complying with notice and opt-out requirements. Generally, disclosure of nonpublic personal information about consumers to local, state, or federal agencies for the purpose of reporting suspected financial abuse of older adults will fall within one or more of the exceptions. These disclosures of information may be made either at the agency’s request or on the financial institution’s initiative.
The following are specific exceptions to the GLBA’s notice and opt-out requirement that, to the extent applicable, would permit sharing of nonpublic personal information about consumers with local, state, or federal agencies for the purpose of reporting suspected financial abuse of older adults without the consumer’s authorization and without violating the GLBA:
In addition, a financial institution may disclose nonpublic personal information with the consumer’s consent or consent of the consumer’s legal representative.
III. POSSIBLE SIGNS OF FINANCIAL ABUSE OF OLDER ADULTS
The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published an advisory in February 2011 that describes potential signs of elder financial exploitation that might trigger the filing of a Suspicious Activity Report (SAR). As described in the advisory, among the possible signs of abuse are: