Senior Safe Act could help curb elder financial abuse

Tara A. LaClair is a Crowe & Dunlevy director and co-chair of the firm’s Securities Litigation, Enforcement & Compliance Practice Group.

Q: What is the Senior Safe Act, and who does it impact?

A: President Trump signed the Senior Safe Act (SSA) into law earlier this year as part of a larger bill pulling back several provisions of the Dodd Frank Act that often tied the hands of financial institutions in reporting suspected financial abuse. In doing so, the SSA provides older Americans with another defense against financial exploitation; something up to one in five fall victim to each year. The SSA, which had bipartisan support, encourages the reporting of suspected abuse by providing immunities to certain financial institutions that provide training to their employees on recognizing and dealing with financial abuse of seniors. The covered financial institutions include banks, savings and loans, investment advisers, insurance companies, broker-dealers and their employees. The SSA seems to recognize these financial professionals may be the first line of defense in spotting signs of elder financial abuse and offers protection from liability and violations of privacy in alerting authorities about potential fraud.

Q: What training is now required to protect the interests of senior investors?

A: The SSA adopts a motivational rather than mandatory approach. On its own, it neither mandates specific training nor requires reporting of financial abuse. Instead, it strongly encourages both by providing immunities contingent on training. To qualify for immunity, training must include “how to identify and report suspected exploitation of a citizen internally, and, as appropriate, to government officials or law enforcement authorities.” The training should also include how to recognize common signs of financial exploitation.  

Q: What steps should financial institutions take to receive the protections of the SSA?

A: Institutions relying on immunity under the SSA are required to keep training records and implement the programs “as soon as practicable.” For individuals who begin employment after the SSA's effective date, the training must be implemented no later than a year after the individual becomes employed. It is also important for institutions to ensure all steps have been documented. Institutions should also provide employees with both written guidance and training on detecting exploitation. The SSA also appears to contemplate a chain of command for reporting, which means institutions should develop a reporting structure if exploitation or abuse is suspected. They should also designate a person or department to respond to questions, provide resources and address reporting issues. Clients of covered financial institutions should expect the seeking of sufficient information to make appropriate risk-based assessments, including requests for a trusted contact person in the event concerns arise.

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Senior Safe Act could help curb elder financial abuse