Pub. 12 2017-2018 Issue 3

WWW.NEBANKERS.ORG 14 unhygienic; older consumer mentioning lottery or sweepstakes opportunities or winnings; and older consumer initiating international wire transfers. • Enhance fraud detection systems to better identify potential abuse and activities inconsistent with his- torical account activity, including atypical ATM card use; unusual overdraft activity; increased account activity or activity in a previously inactive account; changes of address; openi ng of a joint account or the adding of a joint owner to existing account; and unusual cash withdrawals. • Promptly report suspicion of elder financial exploitation to appropriate authorities. • Develop programs and safeguards aimed at protecting seniors, including encouraging seniors to allow the bank to share account information with a trusted relative or friend should the institution conclude the senior may be at risk of exploitation. 14 The report further provides guidance aimed at assuring financial institutions they may report potential elder financial exploitation without running afoul of statutory restrictions on the disclosure of nonpublic personal information, principally the privacy provisions of the Gramm-Leach-Bliley Act (GLBA), which generally require that a financial institution notify con- sumers and provide them an opportunity to opt out before the institution may disclose nonpublic personal information to a nonaffiliated third party. In a section of the report titled, “Understand that the Gramm-Leach-Bliley Act is not a barrier to reporting suspect- ed elder financial exploitation,” 15 the CFPB notes that in 2013, eight federal regulatory agencies with authority to enforce the GLBA privacy provisions issued Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults 16 “to provide financial institutions more certainty” as to whether reporting suspected elder financial exploitation violates the GLBA privacy provisions. 17 The CFPB concludes that the guid- ance “clarifies that reporting financial abuse of older adults to appropriate authorities does not, in general, violate the privacy provisions of GLBA.” 18 As the CFPB notes, the GLBA includes an exemption from the GLBA-mandated notice and opt-out disclosure limitations to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability . 19 According to the CFPB, “this exception generally would allow a financial institution to disclose to appropriate authorities nonpublic personal information in order to report incidents that result in taking an older adult’s funds without actual consent, or report incidents of obtaining an older adult’s consent to sign over assets through misrepresentation of the intent of the transaction.” 20 The CFPB, in the report, also emphasizes the obligations and rights financial institutions have to submit suspicious activity reports (SARs) to the Financial Crimes Enforcement Network (FinCEN). 21 In 2011, FinCEN issued an advisory 22 to financial institu- tions “to assist the financial industry in reporting instances of financial exploitation of the elderly.” 23 In the FinCEN Advisory, FinCEN stated: “SARs continue to be a valuable avenue for financial institu- tions to report elder financial exploitation. Consistent with the standard for reporting suspicious activity as provided [by regulation] 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 en- gage, and the financial institution knows of no reasonable explanation for the transaction after examining the available Historically, bankers have been restrained in reporting financial elder abuse by privacy laws and the fear of retribution for the disclosure of protected personal information. The clear trend nationally and in Nebraska, however, is to provide assurance to bankers that they may take reasonable steps to notify proper authorities if they suspect elder financial abuse. Counselor’s Corner — continued from page 13