U.S. financial regulators issued guidance Tuesday clarifying that financial firms can report suspected elder abuse, notwithstanding privacy rules.
The law generally requires that a financial institution must notify consumers, and give them an opportunity to opt out, before providing non-public personal information to a third party. However, seven federal regulatory agencies issued guidance to clarify that financial institutions can report suspected elder financial abuse to appropriate authorities.
The guidance is being issued by the U.S. Federal Reserve, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission, and several others. The Commodity Futures Trading Commission is also issuing the document as staff guidance.
The Fed notes that older adults can be attractive targets for financial exploitation, and that studies suggest this is the most common form of elder abuse. “Older adults often are targeted because they have retirement savings, accumulated home equity, or other assets. They also are more likely to experience cognitive decline, which can impair their capacity to recognize financial exploitation and scams,” it says.
Moreover, it says that employees of financial firms may be able to spot irregular transactions, account activity, or behaviour that signals financial abuse. “They can play a key role in preventing and detecting elder financial exploitation by reporting suspicious activities to the proper authorities,” it says.