Compliance Update with Amy K
FinCEN Advisory – Elder Financial Exploitation
The Financial Crimes Enforcement Network (FinCEN) issued an advisory earlier this week alerting financial institutions to the rising trend of elder financial exploitation (EFE). FinCEN Advisory, FIN-2022-A002, can be found here.
As discussed in the advisory, “According to the U.S. Department of Justice, elder abuse, which includes EFE among other forms of abuse, affects at least 10 percent of older adults each year in the United States, with millions of older adults losing more than $3 billion to financial fraud annually as of 2019. Despite the fact that EFE is the most common form of elder abuse, the majority of incidents go unidentified and unreported as victims may choose not to come forward out of fear, embarrassment, or lack of resources.”
Credit unions, and other financial institutions, are uniquely situated to detect possible financial exploitation through their relationships with older customers. They therefore play a critical role in helping to identify, prevent, and report EFE to law enforcement and their state-based Adult Protective Services.
The advisory discusses trends of EFE. Elder theft is generally perpetrated by known and trusted individuals of the older adult. Scams, which can disproportionally affect older adults, frequently involve fraudsters, often located outside of the United States, with no known relationship to their victims. Victims of elder financial exploitation are often re-victimized.
Be sure to read and review the advisory in its entirety with staff as it discusses common elder scam typologies and behavioral and financial red flags, a few of these red flags include:
Specific SAR filing instruction - FinCEN requests that financial institutions reference the advisory by including “EFE FIN-2022-A002” in SAR field 2 (“Filing Institution Note to FinCEN”) and mark the check box for elder financial exploitation.
A reminder was also included in the advisory that, “the narrative section of the report is critical to understanding the nature and circumstances of the suspicious activity. The care with which the narrative is completed may determine whether the described activity and its possible criminal nature are clearly understood by investigators. Filers must provide a clear, complete, and concise description of the activity, including what was unusual or irregular that caused suspicion.”
The advisory includes tips on what information would be helpful to include when filing a SAR:
In addition to filing a SAR, FinCEN recommends that financial institutions refer their older customers who may be victims of EFE to the Department of Justice’s National Elder Fraud Hotline at 833-FRAUD-11 or 833-372-8311 for assistance with reporting suspected fraud to the appropriate government agencies. For educational resources on EFE and scams targeting older adults, please see the CFPB’s Office for Older Americans.
CFPB – RFI Relationship Banking and Customer Service
The Consumer Financial Protection Bureau (CFPB) has issued a Request for Information (RFI) regarding relationship banking and customer service. This RFI can be found here and is focused on how customers and members can get better customer service at the big banks and credit unions – over $10 billion. Information is being sought on what customer service obstacles consumers face in the banking market, and specifically, what information would be helpful for consumers to obtain from depository institutions.
As explained by the CFPB, “Relationship banking is an aspirational model of banking that meets its customers’ needs through strong customer service, responsiveness, and care. Relationship banking can play a critical role in helping to foster fair, transparent, and competitive marketplaces.”
While the RFI is focused on large financial institutions, it does make the note that “the CFPB endeavors to help institutions of all sizes foster an inclusive relationship banking model that meets consumers’ reasonable expectations of high levels of customer service and enables consumers to hold financial institutions accountable when they encounter problems.”
The CFPB also discussed challenges for rural customers, remarking that “Rural customers are more likely to visit smaller banks or credit unions, but face decreased banking access due to “[t]rends in banking consolidation, [which] may be a contributing factor to the prevalence of rural banking deserts.” Rural customers rely on smaller banks and the relationship banking they offer, with local knowledge and long-standing relationships, to help maintain the “civic fabric of rural communities.”
The RFI asks for feedback on a number of questions, a few of these questions include:
As always, DakCU members may contact Amy Kleinschmit with any compliance related questions.
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