NEW YORK (MainStreet) ¿ Financial institutions can now sidestep stringent privacy laws in order to report possible financial abuse of older adults. A federal interagency initiative has issued new guidance to financial institutions in order to clarify the privacy provisions of the Gramm-Leach-Bliley Act (GLBA) as it relates to the reporting of suspected financial exploitation of seniors.
The Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB) and the Securities and Exchange Commission (SEC), among other federal regulatory agencies, issued the guidance to clarify that "reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not, in general, violate the privacy provisions of the GLBA or its implementing regulations."
The agencies said that senior financial abuse includes the "illegal or improper use of an older adult's funds, property, or assets." The notice says exploitation of older adults by family members, caregivers, scam artists, financial advisers, and others, while a growing issue, is rarely reported.
"Older adults are attractive targets because they may have significant assets or equity in their homes," the statement says. "They may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, and/or the recent loss of a partner, family member, or friend. A financial institution's familiarity with older adults it encounters may enable it to spot irregular transactions, account activity, or behavior. Prompt reporting of suspected financial exploitation to adult protective services, law enforcement, and/or long-term care ombudsmen can trigger appropriate intervention, prevention of financial losses, and other remedies." The GLBA prohibits financial institutions from disclosing nonpublic personal information about a consumer to a nonaffiliated third party without first providing notice. While there have been prior exceptions, the initiative now clarifies that disclosure of personal information to local, state, or federal agencies for the purpose of reporting suspected financial abuse of older adults will fall within one or more of the exceptions.