their customers and members and, perhaps
even more so with their older customers,
often have the opportunity for face-to-face
interaction with customers making transactions. In addition to having established
relationships that may provide opportunities to educate customers on the topic of
EFE, they may also be in a unique position
to spot irregular account transactions and
unusual customer behavior. Financial institutions that suspect EFE may then pass that
information along to the proper authorities,
such as APS, local law enforcement, and
long-term care ombudsmen, as well as by
filing appropriate SARs.
On a federal level, the Financial Crimes Enforcement Network
(FinCEN) issued an Advisory on February 22, 2011, to assist financial institutions in reporting instances of EFE (FIN-2011-A003).
The advisory contained several examples of “red flags” financial
institution personnel should look for that may reveal EFE or at least
initiate further inquiry with the customer. The advisory stated that
“if a financial institution knows, suspects, or has reason to suspect
that a transaction has no business or apparent lawful purpose or
is not the sort in which the particular customer would normally
be expected to engage, and the financial institution knows of no
reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the
transaction, the financial institution should then file a SAR.” The
advisory further emphasized that financial institutions should report
all forms of EFE according to its internal policies and the requirements of state and local laws and regulations, where applicable.
In May 2013, FinCEN published The SAR Activity Review:
Trends, Tips & Issues. This publication reported there was a sig-
nificant increase in SARs with narratives relating to EFE filed
after issuance of the above Advisory. It also reported that such
filings suggested that many filers had incorporated the FinCEN
guidance into their Bank Secrecy Act/Anti-Money Laundering
(BSA/AML” programs, and that reports of questioning a cus-
tomer’s out-of-character transactions had saved SAR filers and
their customers from incurring significant losses. This publication
also included a message from the Consumer Financial Protec-
tion Bureau (CFPB). The message stated the CFPB’s Office for
Older Americans’ intention to work with FinCEN on raising the
awareness of the use of SARs to report EFE, and on communicat-
ing that Federal law generally permits financial institutions to
report suspected EFE to—or respond to requests for personal
identification from—law enforcement, APS and other relevant
entities. Further, this publication included an article from FinCEN’s
Office of Outreach in which it was noted that the new FinCEN
electronic filing SAR included a check box specific for indicating
that the filer suspects EFE.
On September 23, 2013, the Board of Governors of the Federal
Reserve, Commodity Futures Trading Commission (CFTC), CFPB,
Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), National Credit Union Administration (NCUA),
Office of the Comptroller of the Currency (OCC), and Securities
and Exchange Commission (SEC), together issued the Interagency
Guidance on Privacy Laws and Reporting Financial Abuse of
Older Adults (the Guidance). The Guidance was issued to clarify
the applicability of the Gramm-Leach-Bliley Act (GLBA) privacy
provisions to a financial institution’s reporting of suspected EFE.
Under the Guidance, for financial institutions subject to the
GLBA, reporting suspected EFE to appropriate federal, state and
local agencies does not, in general, violate the 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. Section
502(e) of the GLBA, 15 U.S.C. 6802(e), provides several exceptions to the notice and opt-out requirements. The Guidance states
that disclosure of non-public personal information for purposes
of reporting suspected EFE will fall within one or more of the
exceptions, and that these disclosures may be made either at the
financial institution’s initiative or in response to an agency’s request. The Guidance also referenced a resource tool available to
financial institutions and other organizations for raising awareness
about preventing, identifying and responding to EFE. The new-est version of Money Smart for Older Adults Resource Guide is
available at www.consumerfinance.gov, under Consumer Tools,
Frauds and Scams, Elder Financial Exploitation.
On March 23, 2016, the CFPB simultaneously published an Advisory and a Recommendations and Report for financial institutions
Under the Older Americans Act of 1965, as amended,
“financial exploitation” is the fraudulent or
otherwise illegal, unauthorized, or improper act
or process of an individual, including a caregiver
or fiduciary, who uses the resources of an older
individual for monetary or personal benefit, profit, or
gain, or that results in depriving an older individual
of rightful access to, or use of, benefits, resources,
belongings, or assets (42 U.S.C. 3002).
COMPLIANCE AND REPORTING OF
FINANCIAL EXPLOITATION OF OLDER ADULTS
