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Elder Financial Exploitation

As proclaimed by President Biden, June 15, 2022, was designated as World Elder Abuse Awareness Day; a day where the President encouraged all Americans to be diligent and improve prevention and response to elder abuse, neglect, and exploitation. 

In connection with this day, FinCEN issued an advisory to financial institutions on “Elder Financial Exploitation” (EFE). If this sounds familiar to you, BSA staff may recall that it was in 2011 when FinCEN released their prior advisory on this activity.

FinCEN’s 2022 advisory communicates a rising trend in EFE. So what is EFE? Very simply put, EFE is defined as the “illegal or improper use of an older adult’s funds, property, or assets.” As also noted, EFE can involve physical, emotional, and financial abuse; and elder abuse and EFE definitions can vary per state.

FinCEN’s press release shares that in 2021, 72,000 suspicious activity reports (SARs) related to EFE were filed, which represents an increase of 10,000 SARs from the prior year. 

What to do now?

Institutions should review the new advisory in its entirety. Of note, the new advisory includes:

• New typologies of EFE, which generally involve theft or scams and can include the re-victimization of the older adult. This may include:
• government imposter scams,
• romance scams,
• lottery scams, and
• tech or customer support scams.

• Red flags of EFE, which are provided based on behavioral aspects and financial aspects. This may include:
• the older customer appearing to take direction from someone else and acting nervous,
• a caregiver showing excessive interest in the older person’s finances and does not permit the older person to speak for themselves,
• the older customer suddenly begins discussing and buying convertible virtual currency, and
• the account of the older customer suddenly experiencing non-sufficient funds activity.

• SAR filing instructions, which include the reference of key term “EFE FIN-2022-A002” in SAR field 2 and in the narrative. The advisory also provides guidance on how an institution can expedite their report.

• SAR filing tips and best practices, which do not constitute regulatory obligations, are also provided. For example, this would include providing a statement in the narrative about the age and location of the victim.

Want to learn more about this new advisory?

Interested persons may find FinCEN’s new advisory here.

Sheshunoff Consulting + Solutions wishes everyone a happy and safe Independence Day!

In case you missed it… the FFIEC has announced the availability of 2021 mortgage lending data. This data represents the most comprehensive publicly-available information on mortgage market activity.   

Highlights of the 2021 data reflect:

• information on 23.3 million home loan applications, reflecting both closed-end and open-end application data;
• that the share of mortgages originated by non-depository companies has increased, accounting for almost 64% of first lien 1-to-4 family home purchase loans; and
• that the share of closed-end home purchase loans for first lien, one-to-four family, site-built, owner-occupied properties made to Black or African Americans, Hispanic-Whites, and Asian borrowers increased from the prior year.

The FFIEC’s HMDA data publication can be found here.

Another Step in Analyzing Overdraft Programs

Very recently, the CFPB’s Blog included a new post entitled “Measuring the impact of financial institution overdraft programs on consumers.” 

While the industry is aware of the CFPB’s concerns, which have been voiced in a variety of announcements, this post reflects an additional step in analyzing the offering of overdraft programs in the financial industry. 

The CFPB has reached out to 20 institutions for information on their overdraft practices and requested data on the following customer impact metrics:

1. Total annual dollar amount consumers receive in overdraft coverage compared to the amount of fees charged.
2. Annual dollar amount of overdraft fees charged per active checking account.
3. Annual dollar amount of NSF fees charged per active checking account.
4. Prevalence of frequent overdrafters: the share of active checking accounts with more than 6 and more than 12 overdraft and/or NSF fees per year.
5. Share of active checking accounts that are opted into overdraft programs for ATM and one-time debit transactions.

The CFPB stated their intention was to use this information to identify institutions for further examination and review. While we anticipate receiving more information in the future about this review and analysis, interested persons can find the CFPB’s Blog post here.