Updates on the Senior$afe Act: Protections for an Aging Community

Dec. 19, 2017

Financial exploitation of senior citizens occurs when a family member, caregiver, friend, or stranger fraudulently or illegally uses funds, belongings, or property belonging to an elderly person. In 2011, the Metlife Mature Market Institute estimated that seniors lose nearly $3 billion a year through financial abuse and fraud. True Link Financial issued a report in 2015 increasing that number to nearly $36 billion, reasoning that many instances of abuse go unreported. While the exact dollar amount of senior exploitation is unknown, the financial abuse of hundreds of thousands of American seniors is a grave and disturbing problem.

 

Under current bank privacy laws, financial services professionals face barriers in reporting suspected financial exploitation of seniors. They may be reluctant, for example, to share confidential information about a client with regulators or adult protective services agencies, even when the professional suspects the client may be the victim of financial exploitation or fraud.

 

The Senior$afe Act of 2017 seeks to provide support and immunity to those facing these barriers, including banks, credit unions, broker-dealers, investment advisors, insurance companies, and individuals who work for these institutions.  Under the Act, so long as covered institutions provide training meeting certain specifications to their officers, employees and/or representatives, such institutions and individuals will be immune from civil and administrative liability for reporting suspected financial exploitation of seniors to regulators, law enforcement agencies, and/or adult protective services agencies.  Ideally, this will provide financial services professionals both cover and incentive to help reduce the epidemic of senior financial exploitation occurring in the United States.

 

The Senior$afe Act has gained support from AARP, the North American Securities Administrators Association (NASAA), and many other stakeholders advocating for the protection of seniors and vulnerable adults. The Act has also earned support from trade associations representing financial services professionals—associations that have rejected similar initiatives, such as a NASAA Model Law also aimed at reducing financial exploitation of seniors.  This industry support is due in part to the Act’s lack of a mandatory reporting provision, which would potentially expose institutions to liability for failing to identify and report suspected elder exploitation. (The NASAA Model Law includes such a mandatory reporting provision.)

 

The Act has also gained bipartisan traction recently in both the House and Senate.  In December 2017, the Act was approved by the Senate Banking Committee as part of a larger bill that would reform regulation of credit unions, community banks and small regional banks.  This action follows approval of a companion bill by the House Financial Services Committee in October 2017.  Financial institutions large and small should take note of this progress and prepare themselves to meet the Act’s training requirements in order to avail themselves of the immunity provisions, should the Act become law.


Written By:
Brian Edstrom

Brian Edstrom is a Shareholder and Attorney at Avisen Legal, P.A. He brings to Avisen seven years of experience working for federal and state regulators.

Emilee Walters is a second year law student at the St. Thomas School of Law. Emilee is an Avisen Fellow exploring a legal career in business law.

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