Senior Safe Act: What Compliance Officers Need to Know

Introduction

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

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.

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

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.

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.

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.
For additional information, see: https://www.napsa-now.org/
For law enforcement agency contacts, one resource: https://www.police1.com/law-enforcement-directory/search/

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

Protecting individual customer privacy is one of the foundations of banking. Protecting that privacy is especially important for seniors.
Bank responsibilities for protecting consumer privacy are generally set forth in Regulation P, Privacy of Consumer Financial Information
HOWEVER, it is also important to understand there are important exceptions to the restrictions on disclosing consumer information
Eight federal agencies issued guidelines to help banks understand their responsibilities between protecting privacy and reporting possible elder financial exploitation in September 2013: https://www.occ.gov/news-issuances/news-releases/2013/nr-ia-2013-148a.pdf
The Consumer Financial Protection Bureau (CFPB) and FinCEN updated and renewed the guidance in August 2017.
ABA also offers a Frontline training course on privacy.

Training on elder financial exploitation must be provided:
- As soon as reasonably practical
- For a new hire, within the first year of employment
Records
- Records must be maintained on each employee who has been trained
- The bank must maintain the records regardless of whether the training was provided in-house, by a third party, or before the employee was hired