Regulators Attempt to Curb Financial Elder Abuse

financial elder abuseRegulators Tell Banks Reporting Suspected Financial Elder Abuse is Not Privacy Violation

On September 24th, federal regulators informed money managers and banks that reporting suspected financial elder abuse was not a violation of federal privacy laws.

According to the Government Accountability Office, financial elder abuse is epidemic, draining $2.9 billion from senior citizens’ accounts in 2010 alone. Many banks and credit unions now have fraud protection software and systems in place, and they could potentially use those systems to spot early warning signs of financial elder abuse.

However, banks have hesitated to report suspected financial elder abuse to law enforcement due to the Gramm-Leach-Bliley Act, which requires banks to give consumers the option say no to having their personal information shared with third-parties. The notification from federal regulators, however, says that the government and law enforcement do not count as third parties in this situation, and that reporting suspicious patterns could help adult protective services investigate financial elder abuse cases before lives are destroyed.

The document is called the Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults. The guidance asserts that “specific privacy provisions of GLBA and its implementing regulations permit the sharing of this type of information mobile.ae.org under appropriate circumstances without complying with notice and opt-out requirements.”

In fact, says the guidance, section 502(e) of the GLB Act says:

·         A financial institution may disclose NPI to comply with federal, state, or local laws, rules and other applicable legal requirements, such as state laws that require reporting by financial institutions of suspected abuse. (15 U.S.C. 6802(e)(8))

·         A financial institution may disclose NPI to respond to a properly authorized civil, criminal, or regulatory investigation, or subpoena or summons by federal, state, or local authorities or to respond to judicial process or government regulatory authorities having jurisdiction for examination, compliance, or other purposes as authorized by law. (15 U.S.C. 6802(e)(8))

·         A financial institution may disclose NPI to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability. (15 U.S.C. 6802(e)(3)(B))For example, this exception generally would allow a financial institution to disclose to appropriate authorities nonpublic personal information in order to:

o    report incidents that result in taking an older adult”s funds without actual consent, or

o    report incidents of obtaining an older adult”s consent to sign over assets through misrepresentation of the intent of the transaction.

o    To the extent specifically permitted or required under other provisions of law and in accordance with the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.), a financial institution may disclose nonpublic personal information to law enforcement agencies (including the CFPB, the federal functional regulators, and the FTC), self-regulatory organizations, or for an investigation on a matter related to public safety. (15 U.S.C. 6802(e)(5)

The Consumer Financial Protection Bureau issued the guidelines with the Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Reserve Board of Governors, the Federal Deposit Insurance Corp., Securities and Exchange Commission and the Commodities Futures Trading Commission.

The Strom Law Firm Defends Senior Citizens Against Financial Elder Abuse

If you or a loved one has been the victim of financial elder abuse or exploitation by your care facility, nursing home, caregiver, or a relative, contact us today. Come in for a free consultation with one of our nursing home abuse and neglect lawyers to discuss your situation and hear how we can help. 803.252.4800