A Waste of Paper

The Board of Governors of the Federal Reserve System (Federal Reserve), Commodity Futures Trading Commission (CFTC), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and Securities and Exchange Commission (SEC) issued a guidance to financial institutions “clarifying” applicability of privacy provisions of the Gramm-Leach-Bliley Act to reporting suspected financial exploitation of older adults.  This “guidance” is pretty much a waste of paper.  It makes the pedestrian argument that financial institutions can report suspected financial abuse of older adults without violating the Graham-Leach-Bliley Act.  It also argues that employees of financial institutions can play an important role in combating financial abuse of the elderly.  The flyer says this:

Employees of depository institutions and other financial service providers that constitute “financial institutions” for purposes of the GLBA may observe signs of possible financial exploitation of an older adult. Various federal and state authorities either require or encourage reporting of this type of information to the appropriate agency.

It also makes this rather dubious claim:

 Financial institutions can play a key role in preventing and detecting elder financial exploitation.  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.

I have been on elder abuse prevention committees.  They make a big deal of “training” bank tellers to spot indicators of financial abuse.  However, I suspect that the major effect of asking tellers to watch out for abuse is to make life more difficult for agents who are legitimately appointed and who are faithfully tending to the principal’s business.  Is anyone seriously collecting data to show the effectiveness of making bank tellers into financial abuse investigators?

I have a feeling that it is like the “DARE” program.  Everyone involved in the program is convinced that it is making a huge positive impact on the teen drug problem, but all of the studies indicate that it is wasting money and effort that could be put into much more effective programs.

Great.  Bank tellers are going to watch out for shady characters accompanying older customers when they make cash withdrawals.  Who is going to watch the banks?  Financial abuse of older adults by neighbors, relatives and scammers is nothing compared to the massive syphoning off of the meager financial resources of the poor and elderly by the banks themselves.  People of limited means, elderly or not, are considered to be legitimate prey by the banks and the regulators, alike.  They pay much higher interest rates and get hit with outrageous fees.  I pity the poor sucker who can’t open a bank account and has to pay $10 to cash a minimum-wage pay check – even when it is drawn on the bank where it is tendered!


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2013 John B. Payne, Attorney

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