On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act was signed into law
The statute includes a provision, section 303, that provides Immunity from Suit for Disclosure of Financial Exploitation of Senior Citizens
This provision offers a possible safe harbor for banks that report suspected elder financial exploitation to law enforcement or adult protective services, as long as certain steps are followed
A separate Frontline course on Elder Financial Exploitation provides information on the fraud and red flags bankers should know
This presentation outlines steps for compliance officers
The statute did not assign rule-writing or enforcement authority
Key Terms
A “senior citizen” for purposes of the Senior Safe Act is “an individual who is not younger than 65 years of age.”
There are a variety of definitions that apply to older Americans. For example, the Equal Credit Opportunity Act (ECOA) uses age 62, Medicare uses age 65, and other statutes use other benchmarks. For this statute –and the safe harbor –the threshold is 65 and the term used is senior citizen.
“Exploitation” means the fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that:
Uses the resources of a senior citizen for monetary or personal benefit, profit, or gain, OR
Results in depriving a senior citizen of rightful access to or use of benefits, resources, belonging, or assets.
Immunity
If all the conditions are met, the Senior Safe Act protects individuals from liability in any civil or administrative proceeding for disclosing the suspected exploitation of a senior citizen to a covered agency.
Who is covered?
Only qualified individuals may report suspected elder financial exploitation
Only certain financial institutions are covered
Which financial institutions are eligible?
Credit unions
Depository institutions
Investment advisers
Broker-dealers and transfer agents
Insurance companies and agencies
Which Individuals are Eligible?
For an individual to qualify for the safe harbor, the following conditions must be met:
The individual must have received the appropriate training (defined on slide nine).
When the suspected elder financial exploitation is reported, the person doing the reporting must be serving as a supervisor, a compliance officer, or acting in a legal capacity for the bank (including acting as the bank’s Bank Secrecy Act officer).
Registered representatives (broker-dealers), investment advisers, or insurance agents may also be eligible if the person is associated with a covered financial institution.
When the report is made, it must be made in good faith and with reasonable care.
Is the Bank Protected?
Covered financial institutions will not be liable, including in any administrative proceeding, for reporting possible elder financial exploitation, if:
The report was made by an individual identified in the preceding slide.
The individual was employed by or affiliated with the institution at the time the report was made.
Before the report, the individual received the necessary training.
This immunity does not apply to any act or omission outside the disclosure of the possible elder financial exploitation.
Are There Restrictions on Where to Report?
To qualify for the immunity, a report can only be made to qualified agencies.
A qualified agency is:
A law enforcement agency
A state or local agency responsible for administering adult protective services laws
This an important addition made by the statute
Each state will have different agencies responsible and so it is important to check your local state law
A state financial regulatory agency, including a state securities or law enforcement agency or state insurance regulator
The federal regulators serving on the FFIEC (the CFPB, FDIC, Federal Reserve, NCUA, or OCC)
The Securities and Exchange Commission or a securities association, such as FINRA, registered under the Securities and Exchange Act of 1934
Adult Protective Services
Adult Protective Services (APS) is a social services program provided by state and/or local governments serving older adults and adults with disabilities who are in need of assistance.
APS workers investigate cases of abuse, neglect, or exploitation, working closely with a wide variety of allied professionals such as physicians, nurses, paramedics, firefighters, and law enforcement officers.
The training may be provided by the bank or by a third-party service provider.
The training must be provided to:
The individual qualified to do the reporting
Any officer or employee who may come into contact with a senior citizen as part of his or her regular duties
A senior citizen is defined as a person not younger than 65 years old
Any officer or employee who may review or approve financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen
Content of Training
In order for the training to qualify as appropriate:
Records about who is trained and the materials used for training must be maintained and available to the bank’s supervising regulator
This does not apply to employees no longer with the institution
The training materials must:
Include common signs of possible elder financial exploitation
Explain how to identify and report suspected exploitation of a senior citizen within the bank
When appropriate, how to report that suspected exploitation to government officials or law enforcement
Discuss the need to protect the privacy and respect the integrity of each individual customer
Be appropriate to the person’s individual job responsibilities