Elder Financial Exploitation

Learn how credit unions can identify elder financial exploitation and better protect vulnerable members.

By ViClarity

The Financial Crimes Enforcement Network (FinCEN), along with federal and state regulators, continues to identify elder financial exploitation as a significant and growing financial crime risk. Credit unions are often in a key position to detect, prevent, and report suspicious activity involving elderly or vulnerable members.
 
Common Indicators of Elder Financial Exploitation
Based on regulatory guidance and Bank Secrecy Act (BSA) reporting trends, common red flags include, but are not limited to:

• Sudden or unusual withdrawals inconsistent with prior account activity
• The addition of new joint owners, powers of attorney, or authorized users with no explanation
• Abrupt changes in spending behavior or payment patterns
• Pressure from third parties to move funds quickly or request for secrecy involving particular transactions
• Repeated wire transfers, cashier’s checks, or large cash withdrawals benefiting a third party

 
Credit unions should be particularly alert when these indicators occur alongside changes in a member’s health, cognition, or dependency. FinCEN Advisories emphasize increased concern when these signs are coupled with changes in a member’s cognition, health, or dependency.

Reporting Expectations Under the Bank Secrecy Act
When elder financial exploitation is suspected, credit unions are expected to:

• File a Suspicious Activity Report (SAR)
• Clearly identify elder financial exploitation indicators in the SAR narrative
• Include information about the caregivers, family members, or other third parties involved, when known

 
FinCEN has emphasized that SAR filings related to elder abuse are critical to support law enforcement and adult protective service investigations.
 
Trusted Contacts: Practical Implementation Guidance
The NCUA’s Interagency Statement on Elder Financial Exploitation encourages credit unions to use trusted contacts as a proactive safeguard.
 
Credit unions that choose to offer trusted contacts should consider:

• Offering trusted contact designation at account opening and periodically thereafter
• Clearly documenting when outreach to a trusted contact is appropriate
• Training staff to understand that a trusted contact does not have transaction authority
• Maintaining consistent documentation for procedures and escalation

 
Safe Words, Account Alerts & Vulnerable Member Safeguards
Some credit unions implement voluntary safeguards for vulnerable members, such as:

• Verbal passphrases or “safe words”
• Account-level alerts requiring secondary review
• Internal notes indicating heightened vulnerability (without restricting access)

 
These safeguards should be member-requested, consistently applied, and supported by written policy.
 
Permissible Holds & Information Sharing
Federal law provides important protection for financial institutions that act in good faith:

• The Senior Safe Act permits credit unions to delay disbursements and share information with law enforcement or Adult Protective Services when elder exploitation is suspected, provided staff are appropriately trained in accordance with the Act
• These actions may be taken without violating privacy laws when conditions of the Act are met

 
Credit unions should ensure internal policies outlining when and how protective holds and disclosures may be applied.
 
Risk Management Considerations
CFPB-led interagency guidance recommends that credit unions should consider:

• Training for frontline staff and BSA teams on elder abuse indicators
• Clear escalation and documentation procedures
• Collaboration with local Adult Protective Services and law enforcement
• Member education focused on scam awareness and trusted contact options

 
Proactive identification and timely reporting of elder financial exploitation not only protects members but also demonstrates a credit union’s commitment to regulatory expectations and community trust.
 
Policies, Procedures & Staff Training Expectations
Credit unions should ensure policies and procedures address:

• Identification and escalation of elder financial exploitation
• SAR documentation standards
• Use of trusted contacts and protective holds
• Coordination with Adult Protective Services and law enforcement

 
Staff training should be documented, role-based and conducted annually, role-based, and documented.
 
Examination Expectations & Federal Compliance Tie-Ins
Examiners may assess the following:

• Staff training on elder exploitation indicators
• SAR decisioning and narrative quality
• Use of trusted contacts and protective holds
• Escalation, documentation, and member communication practices

 
Elder financial exploitation often intersects with BSA/AML, Unfair, Deceptive, or Abusive Acts or Practices (UDAAP), and governance expectations.
 
North Dakota vs. South Dakota: Reporting Considerations
Suspected elder abuse or exploitation should be reported to Adult Protective Services  and/or law enforcement:

• North Dakota Health & Human Services
• South Dakota Adult Protective Services

 
Credit unions may share information in good faith to protect vulnerable adults.
 
How ViClarity Can Help
ViClarity supports North Dakota and South Dakota credit unions in addressing elder financial exploitation risks through its Compliance Hotline, which provides timely, regulatory-informed guidance when staff encounter complex or high-risk situations involving vulnerable members.

Through the hotline, credit unions can receive real-time guidance on potential exploitation cases, validate regulatory interpretations related to BSA obligations and Senior Safe Act protections, and support consistent decision-making across their organizations. The hotline also serves as a trusted resource for frontline staff and compliance teams navigating sensitive member situations.

By leveraging the Compliance Hotline provided through the Dakota Credit Union Association (DakCU) and powered by ViClarity, credit unions can strengthen their risk-based approach to protecting vulnerable members while ensuring responses align with federal and state regulatory expectations. In addition, ViClarity offers customizable training options to help credit unions further strengthen staff awareness and preparedness.

Through DakCU’s partnership with ViClarity, member credit unions gain access to industry-leading compliance expertise, practical tools, and timely guidance designed to help navigate evolving regulatory requirements and better protect the members they serve.
 
If you have questions about establishing your members-only account with ViClarity, click here for detailed instructions or contact DakCU's John Alexander.