TIP: This Compliance Courier was prepared by one of The League’s Compliance Specialists – Julie Jennerjohn. All of our specialists are CUNA-certified “Credit Union Compliance Experts.” To learn more about how the Compliance Specialist program could help your credit union, contact Paul Guttormsson.
According to the Department of Justice, older adults (65 and over) comprise 14.9% of the U.S. population, and that percentage will continue to grow. It is estimated that at least 10% of this population will experience some type of elder abuse each year, with some older adults experiencing more than one type of abuse at any given time. Financial fraud and exploitation are common forms of elder abuse.
The federal Senior Safe Act (the “Act”), passed in 2018, encourages financial institutions (including credit unions) to be proactive in protecting the elderly from financial fraud and exploitation. The Act does not mandate reporting, but it extends immunity from liability – in both civil lawsuits and administrative proceedings – to credit unions and certain employees if they disclose the suspected exploitation of a senior citizen to a regulatory or law-enforcement agency.
Immunity only applies, however, if the credit union meets certain conditions, which are outlined in The League’s ii Release No. 0174, Reporting Financial Abuse:
- The Act protects individuals if, at the time they reported the suspected financial exploitation, 1) they were “a supervisor or in a compliance or legal function (including as a Bank Secrecy Act officer)” of the credit union, and 2) they reported the suspected financial exploitation “in good faith and with reasonable care.” (The Act does not define what’s meant by “good faith and with reasonable care.”) Note that under federal law, not all staff gets protection for reporting financial exploitation, only supervisors or those in a compliance or legal function.
- The Act protects the credit union if, at the time the individual reported the suspected financial exploitation, 1) the person was employed by the credit union, and 2) the person got proper training.
That last point – about training being a prerequisite for a credit union to get the immunity – is key. The Act does not require reporting of financial abuse, and it does not require elder abuse training programs at credit unions. Instead, it strongly encourages both by providing immunity that is only available if training is done.
The Act lists three categories of credit union employees to be trained:
- A supervisor or someone in a compliance/legal function making the report;
- Any staff that “may come in contact with a senior citizen as a regular part of their professional duties;” and
- Any staff that “may review or approve financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen.”
The training is to be completed within one year of the employee’s hire date. It can be provided by the credit union or by a third party. The training must:
- Instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen;
- Discuss the need to protect the privacy and respect the integrity of each individual member of the credit union; and
- Be appropriate to the job responsibilities of the individual attending the training.
The credit union must maintain a record of each individual who has completed the training, whether employed or affiliated with the credit union.
In 2018, a collaborative effort by the Wisconsin Attorney General, The Wisconsin Credit Union League and Wisconsin Bankers Association produced a video to help train financial institutions’ front-line staff: Preventing Elder Financial Abuse and Exploitation with Tellers – YouTube. Another resource to consider for training is the Department of Justice (Financial Exploitation | EJI | Department of Justice). Your county’s Human Services department may also be helpful.