Combatting elder financial exploitation: New guidance for institutions

In early December, FinCEN, the Consumer Financial Protection Bureau, state financial regulators and federal banking regulators released the Interagency Statement on Elder Financial Exploitation. While the guidance is clear that it’s not setting any supervisory expectations, prudent financial institutions should review it and consider updating their programs, from policies and procedures to training.

The guidance has nine specific sections and provides an appendix full of useful resources for developing policies, procedures and training materials. Thankfully, financial regulators, law enforcement and other parties have contributed to what is now an abundance of materials that institutions can use.

With all the available guidance related to elder financial exploitation, the challenge institutions face is simplifying those resources to develop and maintain simple yet effective action plans that employees can follow. To that end, using the recent interagency statement as a tool for an organizational self-evaluation is highly recommended. In the context of an anti-financial crime risk management framework, a short list of key questions emerges:

• Prevention: Do we make the effort to educate customers about elder financial exploitation and how to avoid it?
• Detection: Do we provide job-specific training for employees on how to spot elder financial exploitation and how to notify AML/CFT staff? Are our suspicious activity monitoring systems and reports capable of identifying the red flags noted in various publications and cases we’ve observed in the past?
• Mitigation: Is our understanding of state and federal laws that permit delaying the release of funds up to date? Are we taking advantage of laws that permit extended holds? Do we have processes in place for customers to designate trusted contacts; and if so, are there guidelines for communication that address privacy restrictions?
• Investigation: Do we have procedures and training for reporting to adult protective services and the relevant law enforcement contacts based on the nature of the case? Are we up to date on FinCEN’s suspicious activity report (SAR) filing keyword instructions?
• Policy: Do we have job-specific action plan checklists and guidelines that our employees can use to make sure they respond effectively to potential elder financial exploitation while adhering to policies and procedures?

Overall, banks and credit unions should look to not only have compliant programs but also be good corporate citizens and contributors to the fight against elder financial exploitation. Reviewing the recent interagency guidance and self-assessing using these questions can serve as a good starting point.

Most importantly, that research should result in changes that help ensure your organization stays up to date with the various tools (e.g., extended holds, trusted contacts), instructions (e.g., APS reporting, SAR notes), and red flags so that everyone throughout the organization — from frontline staff to back-office personnel — knows their role in handling elder financial exploitation.

How Wipfli can help

Combatting elder financial exploitation takes vigilance and proper guidance. If your institution is looking to enhance its efforts to fight financial crime, Wipfli can help. Our dedicated team of advisors are always up to date with the latest guidance and best practices and are ready to assist your efforts to work for a fairer and more equitable future. Contact an advisor today to learn more.