I. INTRODUCTION
The Consumer Financial Protection Bureau (CFPB) has identified benchmarks to help financial institutions assess and strengthen their current practices for preventing, detecting, and responding to the financial exploitation of older people. The advisory identifies key points for banks to help protect older Americans:
-Develop, implement and maintain internal protocols and procedures for protecting account holders from elder financial exploitation.
-Train management and staff to prevent, detect, and respond to elder financial exploitation.
-Detect elder financial exploitation by harnessing technology.
-Report all cases of suspected exploitation to relevant federal, state and local authorities.
II. CFPB ADVISORY RECOMMENDATIONS
The CFPB makes the following recommendations to banks: A. Develop, implement and maintain internal protocols and procedures for protecting account holders from elder financial exploitation The protocols for management and staff should include training requirements, procedures for making reports, compliance with the Electronic Fund Transfer Act (EFTA) as implemented by Regulation E, means of consent for information-sharing with trusted third parties, and procedures for collaborating with key stakeholders. Protocols likely will vary depending on the institution’s size and risks. B. Train management and staff to prevent, detect, and respond to elder financial exploitation Financial institutions should train employees regularly and frequently, and should tailor training to specific staff roles. Key topics for training include:
-Clear and nuanced definition of elder financial exploitation,
-Warning signs that may signal financial exploitation, including behavioral and transactional indicators of risk, and
-Action steps to prevent exploitation and respond to suspicious events, including actionable tips for interacting with account holders, steps for reporting to authorities, and communication with trusted third parties.
C. Detect elder financial exploitation by harnessing technology The CFPB encourages financial institutions to ensure that their fraud detection systems include analyses of the types of products and account activity that may be associated with elder financial exploitation risk. Some indicators of elder fraud risk may not match conventionally accepted patterns of suspicious activity, but nevertheless may be unusual in light of a particular account holder’s regular pattern of behavior. The CFPB encourages financial institutions using predictive analytics to review their filtering criteria against individual account holders’ patterns and explore additional risk factors that may be associated with elder financial exploitation. D. Report all cases of suspected exploitation to relevant federal, state and local authorities
-Be aware of state reporting mandates. Financial institutions should be aware of state reporting mandates including to whom and when they must report. Reasonable suspicion rather than certainty or proof can trigger the duty to report to state Adult Protective Services, law enforcement, or both.
NOTE: Nebraska law does not require bank employees to report suspected vulnerable adult abuse, neglect, or exploitation. While not obligated to report, bank employees may voluntarily elect to make a report to Adult Protective Service (See Neb.Rev.Stat. § 28-372).
Such a voluntary report may be made upon “reasonable cause to believe that a vulnerable adult has been subjected to abuse, neglect, or exploitation or observes such adult being subjected to conditions or circumstances which reasonably would result in abuse, neglect, or exploitation.” For purposes of the Adult Protective Services Act, a vulnerable adult is defined as “any person 18 years of age or older who has a substantial mental or functional impairment or for whom a guardian may have been appointed under the Nebraska Probate Code.” (See Neb.Rev.Stat. § 28-371.) The Adult Protective Services Act provides that “any person participating in an investigation or the making of a report pursuant to the act or participating in a judicial proceeding resulting there from shall be immune from any liability except: (1) as otherwise provided in the act, (2) for malfeasance in office or willful or wanton neglect of duty, or (3) for false statements of fact made with malicious intent.” (See Neb.Rev.Stat. § 28-375.)
File Suspicious Activity Reports (SARs). The Financial Crimes Enforcement Network (FinCEN) issued an Advisory in 2011 noting that SARs are a valuable reporting avenue for elder financial exploitation cases. FinCEN now provides a designated category of suspicious activity, “elder financial exploitation,” on the electronic SAR form. Although the electronic SAR form includes a checkbox for elder financial exploitation, the narrative remains critical and FinCEN instructs filers to provide clear, complete, and concise description of the suspicious activity.
Understand that the Gramm-Leach-Bliley Act (GLBA) is not a barrier to reporting suspected elder financial exploitation. Financial institutions should be aware of the 2013 Interagency Guidance (the Guidance) from the federal financial regulators that clarifies that reporting financial abuse of older adults to appropriate local, state and federal authorities does not, in general, violate the privacy provisions of GLBA. The Guidance details the relevant exceptions to the GLBA notice and opt out requirements. Understand the roles of first responders. Financial institutions should understand how Adult Protective Services (APS), law enforcement and the long-term care ombudsmen work, and the actions that they will and will not take. Include core components in reports to state and local authorities. A list of basic components of a complete report can help financial institutions support the allegation and assist responders. Expedite documentation requests. When APS, law enforcement and other government entities investigate reports of financial exploitation and request documentation, providing records in a timely manner is essential. FinCEN Guidance clarifies that financial institutions must provide documentation that supports a SAR to certain law enforcement or supervisory agencies when requested, and that service of legal process on the financial institution is not required in such cases. Financial institutions should provide documents to investigatory agencies at no charge.
E. Protect older account holders
Comply with EFTA and Regulation E. Many older consumers experience financial exploitation involving unauthorized electronic fund transfers (EFTs). EFTA and Regulation E offer important protections to these consumers. Under EFTA and Regulation E, financial institutions are obligated to:
--Follow rules for extending time limits for consumers for extenuating circumstances such as extended travel or hospitalization.
--Follow rules for accepting notices of unauthorized EFTs. These rules specify consumer rights regarding the method of providing notice, who provides notice, and the specificity of the notice.
--Confirm that all relevant conditions are met before imposing any liability on a consumer for an unauthorized EFT. For example, older consumers with cognitive challenges may write PINs on or near debit cards. Under Regulation E, such behavior may not be used as a basis for imposing greater liability on a consumer.
--Offer account holders the opportunity to consent to disclosure of account information to trusted third parties when the financial institution suspects financial exploitation. The CFPB recommends that financial institutions establish procedures for enabling consumers to provide advance consent to sharing account information with a designated trusted third party when the financial institution reasonably believes that elder financial exploitation is occurring, has occurred, has been attempted or will be attempted. GLBA permits disclosure of nonpublic personal information with the consent of the consumer. The CFPB recommends developing a plain language consent form as well as procedures for offering consumers the opportunity to consent at account opening and periodically thereafter.
--Offer age-friendly services that can enhance protections against financial exploitation. There are certain services that institutions can offer to their general client base that may be particularly useful to older customers. The CFPB recommends that financial institutions:
--Provide information about planning for incapacity. Advance planning for the possibility of diminished capacity and illness—by, e.g., naming a trusted person to serve as an agent under a power of attorney or other fiduciary—increases the odds that the person managing finances will act in the best interests of the account holder.
F. Collaborate with other stakeholders
The CFPB recommends that financial institutions collaborate with the array of organizations on the local, regional and state level that play a critical role in preventing, detecting, and responding to elder financial exploitation.
Work with law enforcement and APS. Financial institutions should work with law enforcement and APS to: share policies and procedures for detecting, assessing and reporting cases; develop relationships with specific personnel to facilitate timely response to reports and have a point of contact when questions arise; and provide expert consultation and document review to assist law enforcement and APS with case investigations. Participate in and support coordinated efforts to educate older account holders, caregivers and the public. Financial institutions should work with an array of agencies and service organizations to offer educational programs and distribute materials. Participate in and support local or regional multidisciplinary network initiatives. Financial institution personnel can be valuable members of or contributors to local multidisciplinary networks focusing on elder financial exploitation, some of which engage in case review to assist APS and law enforcement. They can assist investigators with identifying and analyzing financial documents and can educate responders on the nuances of banking policy and procedures. Multidisciplinary team members can educate one another and can send representatives to train staff of the other stakeholder organizations.