Joint Agency Statement on Elder Abuse

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Reach out to learn how we assist our clients with NCUA so they save time and money.

Set up a free call here:

https://calendly.com/cuexamsolutions/talk-to-mark-about-any-exam-topic

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

What is Credit Union Regulatory Guidance Including: NCUA, CFPB, FDIC, OCC, FFIEC?

This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.

Samantha: Hello, this is Samantha Shares.

This episode covers the Interagency
Statement on Elder Financial Exploitation

The following is an audio
version of that statement.

This podcast is educational
and is not legal advice.

We are sponsored by Credit Union
Exam Solutions Incorporated, whose

team has over two hundred and
Forty years of National Credit

Union Administration experience.

We assist our clients with N C
U A so they save time and money.

If you are worried about a recent,
upcoming or in process N C U A

examination, reach out to learn how they
can assist at Mark Treichel DOT COM.

Also check out our other podcast called
With Flying Colors where we provide tips

on how to achieve success with N C U A.

And now the statement.

Interagency Statement on
Elder Financial Exploitation

The Board of Governors of the Federal
Reserve System (F R B), Consumer

Financial Protection Bureau (C F P B),
Federal Deposit Insurance Corporation

(F D I C), Financial Crimes Enforcement
Network (FinCEN), National Credit Union

Administration (N C U A), Office of the
Comptroller of the Currency (O C C), and

state financial regulators (collectively,
“the agencies”), are issuing this

statement to provide institutions
supervised by the agencies (“supervised

institutions”) examples of risk management
and other practices that can be effective

in identifying, preventing, and responding
to elder financial exploitation.

This statement does not replace previous
guidance on this subject issued by any

of the agencies, does not interpret or
establish a compliance standard, and does

not impose new regulatory requirements or
establish new supervisory expectations.

It is intended to raise awareness
and provide strategies to supervised

institutions for combating elder
financial exploitation, consistent

with applicable legal requirements.

Background

Elder financial exploitation is
the illegal use of an older adult’s

funds or other resources for the
benefit of an unauthorized recipient.

Elder financial exploitation can deprive
older adults of their life savings

in whole or in part, devastate their
financial security, and cause other harm.

A recent study estimates
annual losses from U.S.

older adults as a result of
elder financial exploitation

at 28.3 billion dollars.

The U.S.

Department of the Treasury’s 2024 National
Money Laundering Risk Assessment described

elder financial exploitation as a growing
money laundering threat, which has been

linked to more than 3 billion dollars
in reported financial losses annually.

Furthermore, a FinCEN review of Bank
Secrecy Act (B S A) 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 dollars in reported
suspicious activity, which may include

both actual and attempted transactions.

In addition to financial losses,
elder financial exploitation can also

result in increased reputational,
operational, compliance, and other

risks for supervised institutions.

Federal and state government agencies
have raised awareness of elder financial

exploitation and worked to educate
supervised institutions and consumers

about prevention and response strategies.

In this statement, the agencies
provide examples of risk management

and other practices that supervised
institutions could consider adopting.

Additionally, Appendix A to this Statement
provides a list of resources issued by

federal and state agencies on this topic.

Section 1.

Governance and Oversight

A number of laws and regulations related
to consumer protection and safety and

soundness may be applicable to instances
of elder financial exploitation.

Consistent with such laws and
regulations, a supervised institution’s

oversight strategies may include
policies and practices to better

protect account holders and the
supervised institution from the impacts

of elder financial exploitation.

Supervised institutions may consider
enhancing or creating risk-based policies,

internal controls, employee codes of
conduct, ongoing transaction monitoring

practices, and complaint processes to
identify, measure, control, and mitigate

elder financial exploitation, provided
such policies do not result in age

discrimination that is impermissible under
the Equal Credit Opportunity Act (ECOA).

Effective actions aimed at guarding
against elder financial exploitation

include open lines of communication among
supervised institutions’ departments

responsible for researching and responding
to unusual account activity, for

example, across functions such as BSA
compliance, fraud prevention, and consumer

protection, including fair lending.

Compliance with applicable privacy or
other legal requirements is necessary to

ensure that the information of account
holders remains confidential and secure.

Section 2.

Employee Training

Supervised institutions may find
it beneficial to provide clear,

comprehensive, and recurring
training for their employees on

recognizing and responding to
elder financial exploitation.

Well-trained employees can increase a
supervised institution’s ability to detect

and report elder financial exploitation.

Employee training may include identifying
red flags for different types of

financial exploitation, providing
proactive approaches to detecting and

preventing elder financial exploitation,
and detailing actions for employees

to take when they have concerns.

Customer-facing employees may be
trained to identify transactional and

behavioral red flags when conducting
transactions for older adults, including

via powers of attorney or other agents.

Employees may also benefit from
detailed escalation processes and

written procedures that promote
timely action for events they are most

likely to encounter in their roles.

Federal law provides that a financial
institution and certain employees are

not liable in any civil or administrative
proceeding for disclosing suspected

elder financial exploitation to covered
agencies if the financial institution

has timely trained its employees on
identifying elder financial exploitation.

Section 3.

Using Transaction Holds
and Disbursement Delays

Supervised institutions have used
transaction holds and disbursement

delays to prevent consumer losses and
respond to various situations that may

involve elder financial exploitation.

These practices should be used
appropriately and in compliance with

applicable laws and regulations.

Some state laws permit supervised
institutions to temporarily hold a

transaction or delay a disbursement
of funds when they suspect any type of

financial exploitation, including elder
fraud.14 These statutes generally provide

timelines for transaction holds, and some
provide immunity for institutions and

employees who meet specific requirements.

Supervised institutions may benefit
from establishing and implementing

policies and procedures based on
applicable laws and regulations.

It may be helpful for supervised
institutions to consider various factors,

such as the account holder’s explanation
of the purpose of the transaction, the

requirements to provide disclosures,
and the prohibitions against unfair,

deceptive, or abusive acts or practices.

Supervised institutions may also consider
procedures for older adult account holders

and their designated representatives
to establish the legitimacy of a

potentially suspicious transaction.

Section 4.

Using Trusted Contacts

Supervised institutions may establish
policies and procedures that enable

account holders to designate one
or more trusted contacts that

employees can contact when elder
financial exploitation is suspected.

For example, an account holder might
identify one or more family members,

attorneys, accountants, or other
trusted individuals and authorize

the supervised institution to contact
them if the supervised institution

cannot reach the account holder or
suspects that the account holder may

be at risk of financial exploitation.

Unless separately authorized by
the account holder, a third-party

trusted contact typically would
not have authority to view account

information or execute transactions.

If a supervised institution establishes
a trusted contact designation

process for account holders, it may
be beneficial to develop clear and

effective procedures for when and
how to disclose to the account holder

and trusted contact that one or more
transactions have indicated that elder

financial exploitation may be occurring.

Any disclosures to account holders
or trusted contacts must comply

with applicable privacy laws and
legal prohibitions, including

the confidential nature of SARs.

Section 5.

Filing SARs Involving Suspected
Elder Financial Exploitation

In certain circumstances, financial
institutions are required under

FinCEN’s, the NCUA’s, and the federal
banking agencies’ laws and regulations

to file SARs related to suspicious
activity and suspected violations of

law or regulation, which may include
fraud and elder financial exploitation.

Additionally, supervised institutions
can voluntarily file SARs for suspicious

activities related to elder financial
exploitation that do not meet the

requirements for mandatory filing,
such as those involving dollar amounts

lower than the regulatory threshold.

Supervised institutions can consider how
to detect and identify possible red flag

indicators of suspected elder financial
exploitation, such as unusual behavior

of an older adult or their caregiver or
an unexpected, large wire transfer out

of an account from which the account
holder has no history of similar activity.

FinCEN’s 2022 Advisory on Elder Financial
Exploitation provides examples of

financial and behavioral red flags.

Supervised institutions can include
any observed red flags of financial

exploitation in the narrative section
of the SAR to describe the reasons

why the activity is suspicious.

FinCEN’s 2022 Advisory also requests
that financial institutions mark the

elder financial exploitation checkbox
(SAR Field 38(d)) and include “EFE

FIN-2022-A002” in SAR Field 2 (Filing
Institution Note to FinCEN) and in the

narrative to indicate when elder financial
exploitation is suspected.23 This approach

provides potentially useful information
to law enforcement and supports

accurate elder financial exploitation
SAR data analysis and trend tracking.

Supervised institutions are reminded
of the confidential nature of SARs

and the prohibition on disclosing a
SAR and any information that would

reveal the existence of a SAR,
except in authorized circumstances.

No financial institution and no current
or former director, officer, employee,

or agent of a financial institution
that reports a suspicious transaction,

may notify any person involved in the
transaction that the transaction has

been reported or otherwise reveal any
information that would reveal that

the transaction has been reported.

Section 6.

Reporting to Law Enforcement, Adult
Protective Services (APS), and/or

Other Entities, as Appropriate

Timely reporting of elder financial
exploitation increases the likelihood

of successful recovery of funds.

In 2013, the C F P B, the Commodity
Futures Trading Commission (C F T C), F

D I C, F R B, Federal Trade Commission
(F T C), N C U A, O C C, and Securities

and Exchange Commission (S E C) issued
joint guidance to confirm that the privacy

provisions of the Gramm-Leach-Bliley
Act generally do not prevent financial

institutions from reporting elder
financial exploitation to appropriate

local, state, or federal agencies.

Some state laws require certain
supervised institutions to report

suspected elder financial exploitation
to APS, local law enforcement,

and/or regulatory authorities.

In states without mandatory reporting,
there may be avenues for supervised

institutions to voluntarily report
suspected elder financial exploitation

to relevant state or local authorities.

Voluntarily notifying law enforcement
directly of suspected elder financial

exploitation and the underlying facts
may expedite and assist law enforcement

investigation and prosecution.

In addition to filing various reports,
supervised institutions can consider

establishing procedures for referring
individuals who may be victims of elder

financial exploitation to the U.S.

Department of Justice (D O J)’s National
Elder Fraud Hotline [phone])

for assistance with reporting to
the appropriate government agencies.

Supervised institutions may also
consider informing older adults about

the options for reporting elder financial
exploitation to local law enforcement,

F T C, the F B I’s Internet Crime
Complaint Center (I C 3), the U.S.

Postal Inspection Service (U S P I S), the
Social Security Administration (S S A), or

other federal, state, or local agencies.31

Some agencies or programs may be able
to help victims recover stolen funds.

For example, the I C 3 Recovery Asset
Team is a domestic program designed

to “streamline communication between
financial institutions and assist FBI

field offices with the freezing of funds
for those who made transfers to fraudulent

accounts under false pretenses.” Another
example is FinCEN’s international Rapid

Response Program that “helps victims
and their financial institutions recover

funds stolen as the result of certain
cyber-enabled financial crime schemes,

including business e-mail compromise.”

Section 7.

Providing Financial Records
to Appropriate Authorities

In addition to the reporting procedures
discussed above, in some instances and

consistent with applicable law, supervised
institutions may expedite documentation

requests for APS, law enforcement, or
other investigatory agencies for active

elder financial exploitation cases.

For information on providing supporting
documentation for financial records

that are associated with a SAR
filing, please refer to FinCEN’s FAQs.

“Supporting documentation” refers
to all documents or records that

assisted a supervised institution in
making the determination that certain

activity required a SAR filing.

Section 8.

Engaging with Elder Fraud
Prevention and Response Networks

Supervised institutions may also help
protect older adults from financial

exploitation by engaging with elder
fraud prevention and response networks

that include professionals from
various agencies and organizations.

These networks are often
cross-disciplinary, collaborative

efforts to protect older adults
from financial exploitation.

These networks can help improve
coordination among supervised

institutions, law enforcement,
A P S, local aging service

providers, and other key partners.

Networks can also help supervised
institutions engage in professional

cross-training, multidisciplinary
case review and coordination, and

community education efforts related
to elder financial exploitation.

Section 9.

Consumer Outreach and Awareness

When consumers are informed
about specific types of scams and

understand perpetrators’ tactics,
they are more likely to recognize a

scam and are less likely to engage
with a perpetrator or lose money.

Supervised institutions can support
their account holders by providing

timely information about trending
scams and ways to avoid them.

Many federal, state, and local
government agencies, as well as

nonprofit organizations, trade
associations, and other groups,

provide free educational resources
for consumers and caregivers about

preventing elder financial exploitation.

Supervised institutions are encouraged
to share free resources provided by

government agencies with their account
holders or as part of community

outreach and awareness efforts.

This concludes the statement.

If your Credit union could use assistance
with your exam, reach out to Mark Treichel

on LinkedIn, or at mark Treichel dot com.

This is Samantha Shares and
we Thank you for listening.