Compliance Blog

Posted by Anthony Demangone

Yesterday, FinCEN released an advisory designed to help financial institutions spot the "red flags" of elder abuse.  The guidance shares a number of "red flags" that might signal elder abuse.  Here are some examples:

• Uncharacteristic nonpayment for services, which may indicate a loss of funds or access to funds;
• Debit transactions that are inconsistent for the elder;
• Uncharacteristic attempts to wire large sums of money;
• Closing of CDs or accounts without regard to penalties.
• A caregiver or other individual shows excessive interest in the elder's finances or assets, does not allow the elder to speak for himself, or is reluctant to leave the elder's side during conversations;
• The elder shows an unusual degree of fear or submissiveness toward a caregiver, or expresses a fear of eviction or nursing home placement if money is not given to a caretaker;
• The financial institution is unable to speak directly with the elder, despite repeated attempts to contact him or her;
• A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the elder without proper documentation;
• The elderly individual's financial management changes suddenly, such as through a change of power of attorney to a different family member or a new individual;
• The elderly customer lacks knowledge about his or her financial status, or shows a sudden reluctance to discuss financial matters.

In addition, FinCEN gives guidance on the completion of SARs involving elder abuse.

In order to assist law enforcement in its effort to target instances of financial exploitation of the elderly, FinCEN requests that financial institutions select the appropriate characterization of suspicious activity in the Suspicious Activity Information section of the SAR form and include the term "elder financial exploitation" in the narrative portion of all relevant SARs filed. The narrative should also include an explanation of why the institution knows, suspects, or has reason to suspect that the activity is suspicious. It is important to note that the potential victim of elder financial exploitation should not be reported as the subject of the SAR. Rather, all available information on the victim should be included in the narrative portion of the SAR. (Emphasis added.)

This is one piece of guidance that your credit union should read, because every member of every credit union hopes to be elderly one day.  (I guess the one exception to this would be a field of membership limited to the world of Logan's Run. I'm hoping the 14 of you who saw that movie or read the book will appreciate the arcane reference.)  In all seriousness, elder abuse is a big problem.  So read the advisory.  It also seems to be tailor made to be the foundation of a great front-line training session.

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Here are some additional items of possible interest.

• Here's a link to NAFCU's comment letter on the Fed's debit card interchange fee proposal. Let me sum it up: Boooo!
• The FDIC reportedly plans to sue three former WAMU executives for more than $1 billion. (Puget Sound Business Journal.)
• NAFCU is offering a "key ratio" webcast on March 2 designed to help credit unions meet the new financial literacy requirement for federal credit union directors. 
• It looks like JPMorgan Chase is now going "above and beyond" when it comes to complying with the SCRA. Or should I say, overcomplying. 

Finally, here are things you don't want to hear or overhear when an electrician is in your house.

• Tim, we're going to need a saw, and I think we'll both need ladders. 
• Ma'am, I've been dreading this job.  This will not be easy. 
• Man, would you look at all of the stuff that that fell out of the ceiling!
• Wow, the last guy really messed this up.  This will take some time to fix.

Yes, I heard all of these phrases on Monday.