NCUA Letter to CUs out on elder financial abuse
Sept. 25, 2013 – NCUA published a Letter to Credit Unions containing interagency guidance released Tuesday to clarify that financial institutions can report suspected elder abuse and financial exploitation without running afoul of the privacy protections of the Gramm-Leach-Bliley Act.
NAFCU Senior Regulatory Affairs Counsel Tessema Tefferi welcomed the guidance, noting credit unions are exemplary in their efforts to ensure their members’ best financial interests. “As member-owned institutions, credit unions are unparalleled in their efforts to protect members against unscrupulous actions, and they are second to none in educating members on how to protect themselves,” he said. “NAFCU supports the interagency guidance as it clarifies and underscores’ credit unions’ authority to report elder financial abuse without fear of violating privacy laws.”
On Tuesday, NCUA Chairman Debbie Matz joined with CFPB Director Richard Cordray, Comptroller of the Currency Tom Curry, FDIC Chairman Martin Gruenberg and other federal financial institution regulators in a call with reporters explaining the guidance, issued to encourage financial institutions to act when they suspect an older member or customer may be the target of financial exploitation.
Cordray, opening the call, said financial institutions have expressed concerns that they may not disclose suspected financial exploitation until they have completed the Gramm-Leach-Bliley Act opt-out process on disclosures to nonaffiliated entities. He said the guidance generally explains such disclosures generally will not violate the act.
Signs that abuse may be happening could include:
- erratic or unusual banking transactions or changes in patterns, such as frequent large withdrawals, uncharacteristic non-payment for services, closing of CDs or accounts without regard to penalties;
- a caregiver showing excessive interest in the older adult’s finances or assets, or who doesn’t allow the older adult to speak for himself or without the caregiver present;
- sudden changes in the older adult’s financial management, such as change in power of attorney to a different family member or a new individual.
Matz said NCUA opined on this GLB Act concern six years ago, noting that the act’s notice-and-opt-out requirements do not apply “when FCUs disclose nonpublic personal information to protect against or prevent fraud, unauthorized transactions, claims, other liability, or to comply with state law.”
Tuesday’s guidance is in NCUA Letter 13-CU-08.
NCUA Letter 13-CU-08, interagency guidance
NCUA's 2007 legal opinion