Banking for Cognitive Aging and Dementia: Consumer Financial Protection Bureau Initiatives Naomi Karp, Senior Policy Analyst Consumer Financial Protection Bureau Office for Older Americans May 10, 2016 WEF- Penn Symposium Philadelphia, PA

Disclaimer  This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the Bureau.  Note: This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics therein. 2

OA Initiatives: Financial Institution Role in Reporting Exploitation  CHALLENGE:  Financial institution personnel observe signs that an older account holder may be the victim of financial abuse, but may be unsure whether federal privacy laws permit them to share their suspicions with government agencies.  CFPB INITIATIVE  CFPB and seven other federal financial regulators issued Interagency Guidance on Sept. 24 on the Gramm-Leach-Bliley Act (GLBA) and reporting financial abuse of older adults.  Guidance clarifies that reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not generally violate the privacy provisions of GLBA. 3

Financial institution role in preventing and responding to elder financial exploitation  CHALLENGE:  Banks and credit unions are uniquely positioned to prevent and respond to elder financial abuse  While some banks and credit unions have comprehensive approach to protecting older account holders, many have room for improvement  GAO report 2012: Adult protective services and criminal justice officials told GAO that financial exploitation generally underreported by banks  CFPB INITIATIVE:  Advisory & Recommendations to financial institutions on preventing & responding to elder financial exploitation released 3/23/16  Best practices to enable banks and credit unions to prevent elder financial abuse and intervene effectively when it occurs 4

Overview of recommendations  Develop, implement & maintain protocols for protecting account holders  Train employees  Detect elder financial exploitation by harnessing technology  Report suspicious activity  Protect older account holders via spectrum of practices and services  Collaborate with other stakeholders 5

Key recommendations re: cognitive aging and dementia  Train staff to recognize signs of diminished capacity/action steps  Use technology to detect account activity that may be unusual in light of account holder’s regular pattern of behavior  Understand APS and who is eligible for protective services  Consumer “negligence,” e.g. writing PIN on debit card, cannot be basis for imposing greater liability than permissible under Reg. E  Offer opportunity to provide advance consent to disclose account information to trusted third parties when FI suspects exploitation  Offer age-friendly services, e.g. information on planning for incapacity, honoring POAs, read-only access for authorized third parties, convenience accounts 6

Managing Someone Else’s Money guides  CHALLENGE:  Declining capacity to handle finances can make older adults vulnerable  People with diminished capacity often need surrogate to handle their money  “Lay fiduciaries” – critical source of help; often have no training; some even commit fraud  CFPB INITIATIVE:  Released a set of national guides called Managing Someone Else’s Money in 2013  User-friendly “how-to” guides for four types of fiduciaries: agents under powers of attorney; guardians; trustees; Social Security representative payees and VA fiduciaries  State guides; replication materials 7

Planning for Diminished Capacity and Illness 8 CHALLENGE:  Some people experience “diminished financial capacity” as they age or become ill, losing the ability to manage their money.  With diminished financial capacity, people are more vulnerable to financial abuse. CFPB INITIATIVE:  With SEC, issued consumer advisory to help people plan for your financial future.  Tips for giving trusted others authority to make financial decisions.  Suggestions for organizing and protecting important documents.  Tips for helping a loved one with diminished capacity.

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