In his 2021 executive budget, Gov. Andrew Cuomo has proposed legislation aimed at protecting older New Yorkers from financial exploitation.

As credit unions are aware, financial exploitation of seniors and adults with disabilities is a fast-growing form of abuse, and many already provide elder financial exploitation prevention training to frontline staff at their branches.

An analysis of elder financial exploitation suspicious activity reports by the Financial Crimes Enforcement Network filed between October 2013 and August 2019 confirms that elders face an increased threat to their financial security, with total numbers of filings and total suspicious activity amounts increasing 20% and 30%, respectively, each year during the time period.

Statistics vary, but the National Adult Protective Services Association has reported that “the rate of financial exploitation is extremely high, with 1 in 20 older adults indicating some form of perceived financial mistreatment occurring in the recent past.”

While these statistics could be even higher because financial exploitation of older individuals often goes unreported, the costs have surged. “While likely under-reported, estimates of elder financial abuse and fraud costs to older Americans range from $2.9 billion to $36.5 billion annually,” according to the National Council on Aging.

Cuomo says his proposal would strengthen financial institutions’ abilities to place holds on accounts of “vulnerable” adults if there is sufficient reason to believe they are victims of any “actual or attempted” financial exploitation. This could be done by creating parameters for the holds, providing financial institutions and employees with immunity from civil liability for holding transactions, and requiring reporting of the hold to the Office of Children and Family Services, according to the governor’s website.

In addition, the Department of Financial Services would create a new certification program for banking institutions, with the goal of bolstering training and education regarding financial exploitation.

Every state, including New York, already has some form of elder abuse protections, a complete list of which is included on the American Bar Association’s website. Further, a recent study by WalletHub ranked states (including the District of Columbia) with the best elder-abuse protections, with New York State landing at 22. Massachusetts ranked first; New Jersey was last.

The New York Credit Union Association is generally supportive of legislation that protects credit union personnel when it comes to spotting, reporting and taking actions to prevent suspected elder financial abuse. However, the Association believes the proposed legislation needs significant language revisions before it is finalized. The Association has shared these specific concerns with key lawmakers and their staff.