Pub. 12 2017-2018 Issue 3

NEBRASKA BANKERS ASSOCIATION 15 For more information, contact Patrick Griffin at Kutak Rock LLP at (402) 346-6000 or patrick.griffin@ kutakrock.com . Griffin leads Kutak Rock LLP’s financial services litigation practice group in Omaha, where he concentrates on providing risk management and litigation services to banks, broker dealers, and registered investment advisors. facts, including the background and possible purpose of the transaction, the financial institution should then file a Suspicious Activity Report. “A financial institution may also file with FinCEN a Suspicious Activity Report with respect to any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by FinCEN regulations.” 24 The CFPB, in its report, reiterated FinCEN’s observations: “SAR filing is mandatory for banks . . . when certain thresholds are met. If the transaction amounts are below the mandatory filing thresh- old, consider filing SARs anyway. As FinCEN stated in its 2011 Advisory on Elder Financial Exploitation, “[a] financial institution may also file with FinCEN a Suspicious Activity Report with respect to any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by FinCEN regulations.” 25 In 2007, the NBA issued training ma- terials titled, “How to Stop Elder Abuse & Exploitation.” 26 The NBA updated these materials in 2013. The training materials speak to the definition of elder financial exploitation, how to spot it, and where to report it. The materials also speak to state and federal legal issues regarding the reporting of suspected elder abuse and the attendant disclosure of protected customer information. This excellent work is well worth reading. The NBA materials highlight statuto- ry authority in Nebraska supporting the right of banks to report potential elder financial abuse to appropriate regulatory and legal authorities. 27 Under Nebraska’s Adult Protective Services Act, 28 certain health care providers and others are required to report, among other things, suspected “exploitation” of a “vulnerable adult.” Per the act, a “vulnerable adult” is “any person 18 years of age or older who has a substantial mental or functional impairment or for whom a guardian or conservator has been appointed under the Nebraska Probate Code.” 29 “Exploita- tion” includes “wrongful or unauthorized taking, withholding, appropriation, con- version, control, or use of money, funds, securities, assets, or other property of a vulnerable adult or senior adult by any person by means of undue influ- ence, breach of a fiduciary relationship, deception, extortion, intimidation, or threat of force, isolation, or any unlaw- ful means or by the breach of a fiduciary duty by the guardian, conservator, agent under a power of attorney, trustee, or any other fiduciary of a vulnerable adult or senior adult.” 30 While the act does not require banks to report “exploitation” of a “vulnerable adult,” the act provides that persons other than those required “may report abuse, neglect, or exploi- tation if such person has 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.” 31 Importantly, the act provides “[a]ny person participating in an investigation or the making of a report pursuant to the Adult Protective Services Act . . . shall be immune from any liability except,” as is relevant here “for false statements of fact made with malicious intent.” 32 Recently, the Nebraska Legislature amended existing statutory provisions which relieve businesses from the obli- gation to disclose confidential customer information unless certain conditions are met, such as pursuant to an enforce- able subpoena or court order. 33 The amendment provides, among other things, that the statutory provision does not prohibit “[t]he disclosure of records or information or the making of reports pursuant to a statute which, by its terms or rules and regulations adopted and promulgated thereunder, permits the disclosure,” 34 thus making it clear that the provision does not preclude volun- tary disclosures pursuant to the Adult Protective Services Act. As the CFPB has noted, “[e]lder financial exploitation has been called the crime of the 21 st century.” 35 To echo Director Quandahl, now is the time to review your strategies to help protect your elder customers from this increas- ing, insidious threat.  1 Table 3. Projections of Population, U.S. Census Bureau, Population Division, December, 2014. 2 Id. 3 Alzheimer’s Association 2017 Alzheimer’s Disease Facts and Figures Report, available at http://www.alz. org/facts/. 4 Id. 5 Id. (See Nebraska State Fact Sheet accessible by active link in Report section captioned “Alzheimer’s Disease Facts in Each State.”). 6 Id. 7 The U.S. Census Bureau estimated that approximately 15 percent of Nebraska’s estimated 1,907,000 residents, or approximately 286,000 Nebraska residents, were 65 years of age or older as of 2016. https://www.census.gov/quickfacts/NE. 8 National Adult Protective Services Association website at http://www.napsa-now.org/policy- advocacy/exploitation/. 9 Financial institutions are encouraged to contact Michael McDannel, Nebraska Department of Banking and Finance financial institutions counsel, to address questions or concerns regarding financial elder exploitation, including to report instances of suspected abuse. McDannel can be reached at (402) 471-2171. 10 Available at http://files.consumerfinance. gov/f/201603_cfpb_advisory-for-financial-institutions- on-preventing-and-responding-to-elder-financial- exploitation.pdf. 11 Available at http://files.consumerfinance . gov/f/201603_cfpb_recommendations-and- report-for-financial-institutions-on-preventing-and- responding-to-elder-financial-exploitation.pdf. 12 March 23, 2016, Release, “CFPB Issues Advisory and Report for Financial Institutions on Preventing Elder Financial Abuse,” available at https://www. consumerfinance.gov/about-us/newsroom/cfpb- issues-advisory-and-report-for-financial-institutions- on-preventing-elder-financial-abuse/. 13 Advisory, at page 1. 14 Report, at pages 12-57. 15 Id. at pages 29-31. 16 Available at https://www.federalreserve.gov/ newwsevents/pressreleases/bcreg20130924a.htm. 17 Report, at page 29. 18 Id. 19 Id., at pages 29-30. 20 Id., at page 30. 21 Id., at pages 25-28. 22 Available at https://www.fincen.gov/resources/ advisories/fincen-advisory-fin-2011-a003. 23 FinCEN Advisory, at page 1. 24 Id., at page 3. 25 Report, at page 26. 26 Available at http://www.nebankers.org/index.php/ products-a-services/bank-security/elder-abuse- prevention-handbook.html#.WZxGMCiGOUk. 27 Training Materials, at page 11. 28 Neb. Rev. Stat. §§ 28-348 et seq. 29 Neb. Rev. Stat. §§ 28-371. 30 Neb. Rev. Stat. §§ 28-358. 31 Neb. Rev. Stat. §§ 28-372. NOTE: While the Protective Services Act makes it illegal to exploit senior adults (65 years of age or older) and vulnerable adults (see Neb. Rev Stat. §28-386), the mandatory and permissive reporting provisions of Neb. Rev. Stat. §§ 28-372 apply only as to exploitation of vulnerable adults. 32 Neb. Rev. Stat. § 28-375. 33 Neb. Rev. Stat. §§ 8-401 et seq. 34 LB 140, 2017, codified as Neb. Rev. Stat. § 8-1401(3)(b). 35 Advisory, at page 1.