|May 28, 2013|
Previously published on May 24, 2013
Gail Hillebrand, the CFPB’s Associate Director of its Consumer Education and Engagement Division, testified before the House Committee on Energy and Commerce, Subcommittee on Commerce, Manufacturing, and Trade. Ms. Hillebrand’s testimony consisted of a review of the recent efforts of the division’s Office of Financial Protection for Older Americans.
Noting that those Americans age 65 and older have an approximate collective net worth of $18 trillion and are therefore attractive targets of fraudulent scams, Ms. Hillebrand testified that the CFPB has “placed a priority on preventing, detecting and redressing elder financial exploitation.” She identified five problems that the CFPB is working to combat:
- Americans do not know who they can trust to provide financial advice. Ms. Hillebrand explained that the CFPB has previously provided a report and recommended actions for federal and state policymakers to consider with respect to promulgating standards for financial advisers to acquire senior designations and, thus, create a uniform and trusted designation for seniors to rely upon when seeking advice.
- Older Americans, and often their caregivers, do not know how to spot and avoid the numerous fraudulent schemes that target seniors. The CFPB is currently developing a community education program called “Money Smart for Older Americans” that will focus on preventing, reporting and recognizing such scams. The program is being developed in collaboration with the FDIC and will be released later this year.
- Older Americans rely on “lay fiduciaries” to handle their finances. Recognizing that many of these “lay fiduciaries” (i.e., friends or family members) often have no training; the CFPB is currently developing a set of guidelines for such fiduciaries. Specifically, the CFPB anticipates producing multiple guides that will explain fiduciary fundamentals, such as what a fiduciary does, record keeping requirements, prohibitions on commingling and other basic advice relating to money management for seniors. The guides are due to be published later this year.
- Those in nursing homes and assisted-living facilities are often targeted. The CFPB seeks to aide those living in nursing homes and assisted-living facilities by producing a national guide to assist facility owners and operators with identifying cases of financial exploitation directed toward their residents. The guide is expected to be released later this year.
- Financial institution personnel observe that older account holders may be the victim of fraudulent schemes, but are often unsure as to whether the personnel are legally permitted to report such suspicions without violating privacy laws. The CFPB seeks to develop a strategy to communicate to financial institutions that the Gramm-Leach-Bliley Act generally does not prohibit personnel from reporting suspected scams and exploitation.