In union with six other federal regulatory agencies, the Consumer Financial Protection Bureau jointly issued an interagency guidance on reporting financial abuse of older adults. According to the guidance, “it is generally acceptable under the law for financial institutions to report suspected elder financial abuse to appropriate local, state or federal agencies.”
In most cases, the Gramm-Leach-Bliley Act (GLBA) requires that financial institutions notify consumers and give them an opportunity to opt out – and the consumer does not take that opportunity – before releasing nonpublic information to a nonaffiliated third party.
According to the guidance, however, the GLBA provides exceptions to this general rule that permit disclosure without “first complying with notice and opt-out requirements. Generally, disclosure of nonpublic personal information about consumers to local, state, or federal agencies for the purpose of reporting suspected financial abuse of older adults will fall within one or more of the exceptions.” For example, the GLBA provides that a financial institution may disclose nonpublic personal information to comply with federal, state or local laws that require reporting by financial institutions of suspected abuse.
In a press call, CFPB director Richard Cordray defended the guidance: “We believe that employees at financial institutions can be instrumental in preventing such fraud.…Employees may be able to spot irregular transactions, abnormal account activity, or unusual behavior that signals financial abuse sooner than anyone else can.”
In summary, Cordray said that “the central point is that reporting suspected elder financial abuse to the appropriate authorities is typically the right thing to do and generally will not violate the Gramm-Leach-Bliley Act.”
Nora Dowd Eisenhower, assistant director of the CFPB’s office for older Americans, said the guidance “will send a clear signal that the Gramm-Leach-Bliley privacy rules generally do not bar financial institutions from making timely calls for intervention by appropriate authorities” and urged “collaboration in local communities across the country to stop elder financial exploitation.”