Regulators tell banks that reporting elder abuse doesn’t violate privacy laws
In a move intended to help elderly victims of financial
exploitation, federal regulators today told banks and money managers that they
can report suspected financial abuse to authorities without fear of violating
Financial abuse of the elderly is an epidemic, according to
the recent Government Accountability Office, draining $2.9 billion from
seniors’ accounts in 2010 alone.
Bank and credit union tellers "may be able to spot
irregular transactions, abnormal account activity, or unusual behavior that
signals financial abuse sooner than anyone else can," said Richard
Cordray, director of the Consumer Financial Protection Bureau.
But banks and money advisors have often hesitated to report
their suspicions to law enforcement for fear they will run afoul of the
Gramm-Leach-Bliley Act. That law requires banks to notify consumers and give
them a chance to opt-out before they share information with third-parties.
Today's guidance assures financial institutions that they
can report suspicions to law enforcement agencies. The new guidance also should
make it easier for adult protective services agencies investigating financial
abuse to get access to bank records.
The Consumer Financial Protection Bureau issued the
guidelines with the Office of the Comptroller of the Currency, the National
Credit Union Administration, the Federal Reserve Board of Governors, the
Federal Deposit Insurance Corp., Securities and Exchange Commission and the
Commodities Futures Trading Commission.