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From Banking and Finance Law Daily, August 31, 2017

CFPB, FinCEN target elder financial exploitation detection and prevention

By Charles A. Menke, J.D.

Elder financial exploitation (EFE)—the illegal or improper use of an older person’s funds, property or assets—has become the most prominent form of elder abuse in the United States, although only a small fraction of incidents are detected and reported, according to the Consumer Financial Protection Bureau and the Treasury Department’s Financial Crimes Enforcement Network. In a "Memorandum on Financial Institution and Law Enforcement Efforts to Combat Elder Financial Exploitation," the agencies emphasized that financial institutions can play a key role in detecting, responding to, and preventing EFE. Moreover, prevention and response to EFE is improved when financial institutions, law enforcement, and state or local adult protective service agencies (APS) develop collaborative relationships.

Timely reporting. A financial institution should report suspicious EFE activity to law enforcement and the state or local APS, regardless of whether the reporting is mandatory or voluntary under state or federal law, the memorandum stated. "Timely reporting…is critical in engaging entities that may have complementary information on the victim or the perpetrator from other sources and may be well positioned to collaborate on investigations."

Collaborative relationships. Meanwhile, collaborative relationships between financial institutions, law enforcement, and APS can facilitate the timely response to reports and ensure that staff at each organization has appropriate points of contact to address any questions or challenges. For example, financial institutions and law enforcement can share information about each organization’s policies and procedures for detecting, assessing, and reporting EFE. In addition, financial institutions can provide consultation on banking and finance documents, processes, and procedures to assist law enforcement and APS with investigations.

Suspicious Activity Reports. The memorandum further noted that Suspicious Activity Reports filed with FinCEN by a financial institution can also assist law enforcement investigations of EFE, even at the local level. "SARs can play an important role in the fight against EFE by providing information and references to any supporting documentation that can trigger an investigation, support an ongoing investigation, or identify previously unknown subjects and entities," the memorandum stated. The agencies cautioned, however, on SAR access and use restrictions, as well as confidentiality concerns regarding the existence and disclosure of an SAR.

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