Federal and state financial regulators today released a joint statement with strategies and advice for financial institutions on identifying, preventing and responding to elder financial exploitation. The statement does not replace previous agency guidance on the subject nor constitutes new regulatory requirements, the regulators said.
Elder financial exploitation is defined as the illegal use of an older adult’s funds or other resources for the benefit of an unauthorized recipient, according to the statement. A recent study concluded that the problem results in annual losses of more than $28 billion for older U.S. adults. “Furthermore, a [Financial Crimes Enforcement Network] review of Bank Secrecy Act report data found that financial institutions filed 155,415 reports related to elder financial exploitation between June 15, 2022, and June 15, 2023, associated with more than $27 billion in reported suspicious activity, which may include both actual and attempted transactions,” it added.
The Federal Reserve, FDIC, Office of the Comptroller of the Currency and Consumer Financial Protection Bureau were among the federal agencies that signed the statement.
The statement noted that many state and federal laws and regulations related to consumer protection may apply to elder financial exploitation. It suggested that financial institutions consider creating or enhancing risk-based policies, international controls, transaction monitoring practices and other internal policies to address the problem, as long as those policies do not result in age discrimination as defined by the Equal Credit Opportunity Act.
Other recommendations for mitigating elder financial exploitation include the use of employee training, transaction holds and disbursement delays, and having account holders designate trusted contacts.
In related news, the American Bankers Association and ABA Foundation provide resources and tools to help banks understand and address elder financial exploitation, including a recent guide to filing suspicious activity reports about suspected cases of exploitation.
