Would More Information Sharing Prevent Elder Abuse?

November 27, 2018 at 9:24 am Leave a comment

Image result for elderly person bankingMaybe it’s because I hit one of those depressing milestones the other day when the young lady whom I was buying tickets from at the Museum of Natural History coyly asked if there was anyone I was buying tickets for who was 60 or older? Considering that my twin brother wasn’t on line and my daughters were the only ones with me, I can only assume she was talking about me even though I don’t look a day over 49 ½.

But as this article underscores,  issues surrounding the elderly and financial mismanagement are  getting more and more attention. A suggestion by a researcher at the Federal Reserve Bank in Philadelphia is to authorize and encourage the sharing of information among financial institutions about potential financial exploitation in much the same way they have been encouraged to share information about potential money laundering and terrorist activity since passage of the Patriot Act in 2001. I want to be absolutely clear here. Currently sharing such information among financial institutions is illegal. This is a suggested policy which would require amendments to federal law in order to take effect. Would this be worth the risks?

The first question we have to answer is what exactly we are seeking to prevent? If our goal is to prevent  criminal financial exploitation then the existing framework may well be good enough.  State laws either mandate reporting by  or protect financial institutions that  choose to report suspected abuse.  And federal law keeps getting more and more robust more and more robust. Financial institutions can   file Suspicious Activity Reports specifically dealing with elder financial exploitation and  S.2155 included provisions that will soon   start shielding institutions from lawsuits  when they report suspected exploitation  provided  they comply  certain training requirements.   

In contrast, if our goal is to spot early signs of dementia or general cognitive decline so we can put the member and their loved ones on notice  than expanded information sharing makes sense. For example, chances are that the elderly person you are dealing with has money not only at your credit union but with a brokerage firm as well. In addition, one of the more disturbing trends we are seeing is an  increase in borrowing among older individuals. If we really want to stop the effects that cognitive decline can have on a person’s ability to manage their resources as well as spot financial exploitation then shouldn’t we give institutions the ability to holistically examine how their members are handling their finances? Furthermore, data analytics seems ideally suited to spotting signs of financial mismanagement.

The simple truth is, if we want to really protect the elderly from financial abuse and mismanagement  then we have to have an honest discussion about how to balance the rights of individuals to financial privacy against the increased risks of mental deterioration and exploitation that come with age. I for one will never be comfortable about any group of institutions, no matter how well intentioned, being able to make judgments about what I can and can’t do based on my age. Besides, I am so grossly disorganized that no lesser expert than my wife has commented that it will take her years to realize I have gone senile.

 

 

Entry filed under: Compliance, General, Legal Watch. Tags: , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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