Compliance Blog

Categories: Fraud BSA

CFPB Releases Resources for Combating Elder Financial Abuse; Pilot Advisory Opinion Program

Last year, the CFPB issued an updated advisory urging financial institutions to report suspected elder financial abuse to local, state and federal authorities in addition to filing suspicious activity reports (SARs). Last year’s advisory also contained best practices to aid financial institutions in preventing and responding to elder financial abuse.

To continue in its efforts to identify and reduce elder financial abuse, the agency recently released an online resource to help credit unions and communities form networks to increase their capacity to prevent and respond to elder financial abuse. The CFPB has found that networks of cooperating people help to increase coordination among responders, service providers, and other relevant stakeholders. This coordination can lead to the sharing of resources and information necessary to stop bad actors who engage in elder financial abuse. The Elder Fraud Prevention and Response Networks Development Guide (Networks Development Guide) offers electronic tools, templates, and exercises to help interested parties create a network to fight elder fraud. The Networks Development Guide is meant to help credit unions connect key stakeholders in order to prevent, detect, and respond to elder financial abuse.

The Networks Development Guide includes a model plan that credit unions can use to set up retreat and post-retreat meetings for bringing stakeholders together to discuss collaborative efforts in reducing elder financial abuse. The model plan breaks up the network building process into four steps: plan a retreat, host a retreat, reconvene and establish the network, and expand network capabilities.

Plan a retreat – The guide includes tools for assisting credit unions with identifying the right stakeholders and professionals to join the network. A credit union using these tools should be able to establish a core team and outline the date, time and location of the retreat in advance. The CFPB has also included meeting agenda templates to assist in planning the retreat.

Host a retreat – A credit union hosting a retreat can use the CFPB’s guide to find network-building group exercises. These activities are designed to help stakeholders identify the challenges and opportunities for addressing elder financial abuse in their communities.

Reconvene and establish a network – The reconvene stage allows the credit union to schedule a follow-up meeting to solidify the core leaders of the network and to create working groups, each with their own set of goals and priorities. The guide contains resources for forming groups, selecting group activities, and creating a referral guide for everyone in the network to use.

Expand network capabilities – The guide includes resources for planning the future of the network, evaluating and measuring the network goals, conducting trainings, and more. The CFPB also encourages reaching out to new stakeholders for creating additional working groups when appropriate.

Many credit unions may benefit from the creation of a network designed to address elder financial abuse. The CFPB even encourages these actions to take place remotely through teleconferencing methods to support social distancing efforts and allow more stakeholders to participate.

Keep in mind your credit union’s procedures and previous guidance when it comes to filing SARs for elder financial abuse. FinCEN's advisory FIN-2011-A003 provides information as to how the agency wants SARs in this area to be filed. For example, FinCEN notes that the victim should not be reported as the subject of the SAR. Additionally, the agency wants financial institutions to use the term "elder financial exploitation" in the narrative section of the SAR along with an explanation of why the credit union knows, suspects, or has reason to suspect that the activity is suspicious.  Although credit unions are not required to file a SAR on an unknown suspect unless the dollar amount involved is more than $25,000, the credit union can still decide to file a SAR on suspicious activity below the regulatory threshold. Those in charge of filing SARs should review their credit union's policies and procedures for filing SARs on suspicious activity related to elder financial abuse.

FinCEN’s advisory also discusses “red flags” that may be helpful in detecting elder financial abuse, including changes in banking patterns, changes in interactions with caregivers and family members, and unusual relationships with new friends or strangers. A credit union that builds a strong network of community members and stakeholders may have a better chance at documenting these types of changes as evidence of elder financial abuse and may be able to report it quickly.

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CFPB Launches Pilot Advisory Opinion Program

Yesterday, the CFPB announced a pilot advisory opinion (AO) program to publicly address regulatory uncertainty in its regulations.  The pilot AO program allows credit unions seeking to comply with regulatory requirements to submit a request for clarification about uncertainties.  The CFPB will then select topics based on the program’s priorities and make the responses available to the public. It appears this program will function similarly to NCUA’s legal opinion letters because the responses will be based on real scenarios faced by credit unions and the public availability of guidance will help to inform other credit unions facing the same issues. Requests for advisory opinions may be submitted via email to advisoryopinion@cfpb.gov.

About the Author

Loran Jackson, NCCO, Regulatory Compliance Counsel, NAFCU

Loran Jackson, Regulatory Compliance Counsel

Loran Jackson was named regulatory compliance counsel in April 2019. In this role, Jackson helps NAFCU members with a variety of federal regulatory compliance issues.

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