Regulatory Agencies Issue Statement On Elder Financial Exploitation

A coalition of six federal regulatory agencies, along with state financial regulators, have issued an interagency statement on the realities of elder financial exploitation (EFE) and its potential economic impacts on older Americans.

The federal regulators that stamped their names on document include the Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board of Governors, the Federal Deposit Insurance Corp. (FDIC), the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC). Their statement is designed to highlight “examples of risk management and other practices that can be effective in identifying, preventing, and responding to elder financial exploitation.”

“Older adults who experience financial exploitation can lose their life savings and financial security and face other harm,” the agencies explained in an announcement of the collaboration. “A FinCEN financial trend analysis of Bank Secrecy Act reports over a one-year period ending in June 2023 found that about $27 billion in reported suspicious activity was linked to elder financial exploitation.”

Older people are often targets of EFE, and information handled by institutions under the regulatory purview of these agencies are highly-sought targets for bad actors since many seniors tend to have more wealth than younger potential targets.

The statement is intended to provide a series of potential risk factors and mitigation steps for these institutions to take. These include effective governance and oversight, as well as employee training, to allow for quicker spotting of a potential instance of EFE.

“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,” the statement said in part.

Institutions supervised by these regulatory bodies have used tools like transaction holds and disbursement delays to disrupt attempted instances of EFE, so long as they’re used in compliance with any applicable laws and regulations. Institutions could also add trusted contacts for clients to designate on their accounts to check with in case of a disruptive event or suspected fraudulent activity, the statement read.

The statement also includes guidance for involving other entities — including Adult Protective Services or law enforcement — should an instance rise to a level that requires such intervention.