[Congressional Record Volume 161, Number 159 (Wednesday, October 28, 2015)]
[Senate]
[Pages S7595-S7596]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Ms. COLLINS (for herself and Mrs. McCaskill):
S. 2216. A bill to provide immunity from suit for certain individuals
who disclose potential examples of financial exploitation of senior
citizens, and for other purposes; to the Committee on Banking, Housing,
and Urban Affairs.
Ms. COLLINS. Mr. President, as Chairman of the Senate Aging
Committee, I am delighted to be joined today by my ranking member and
good friend, Senator Claire McCaskill, in introducing the Senior$afe
Act of 2015, a bill that would put in place a common sense plan to help
protect American seniors from financial fraud.
According to the GAO, financial fraud targeting older Americans is a
growing epidemic that costs seniors an estimated $2.9 billion annually.
Protecting seniors from financial exploitation and fraud is one of
the top priorities of the Aging Committee. Over the course of the past
two and a half years, our Committee has held 15 hearings, six since
January, examining how fraudsters find and exploit their victims and
what can be done to stop them. The frauds we have highlighted have
ranged from the infamous ``Jamaican Lottery Scam,'' that reached its
height in 2013, to the notorious IRS phone scam that burst onto the
scene this spring, and, more recently, to the shady practices of the
pension advance industry. Sadly, not all scammers are strangers to
their victims, in too many cases, the senior is exploited by someone he
or she knows well.
Although the various scams we have examined differ in scope and
structure, one factor is common to all--the fraudsters need to gain the
trust and active cooperation of their victims. Without this, their
schemes would fail. That is why it is so important that seniors
recognize as quickly as possible the red flags that signal potential
fraud.
Unfortunately, many seniors do not see these red flags. Sometimes
they are too trusting or are suffering from diminished capacity, but,
just as often, they miss the flags because the swindlers who prey on
them are extremely
[[Page S7596]]
crafty and know how to sound convincing. Whatever the reason, a warning
sign that can slip by a victim might trigger a second look by financial
service representatives trained to spot common scams, who know enough
about a senior's habits to question a transaction that doesn't look
right. In our work on the Aging Committee, we have heard of many
instances where quick action by bank and credit union employees,
broker-dealers, and investment advisors has stopped a fraud in
progress, saving their customers untold thousands of dollars.
Let me give you an example. Earlier this year, a senior citizen in
Vassalboro, ME, was looking to wire funds from his account at Maine
Savings Federal Credit Union to an out-of-state location, supposedly to
bail out a relative who was in jail. Something about this transaction
didn't sound right to the teller supervisor at the credit union. She
questioned the customer, who told her he had gotten a call from an
``official'' at the jail, who had instructed him not to speak to anyone
about the transaction. Fortunately for this senior citizen, this
supervisor was able to spot this as a scam, and her quick thinking
saved him from falling victim to it.
In another case, just two weeks ago, an alert bank employee in
Nebraska noticed suspicious withdrawals from the checking account of a
senior citizen who was a customer of the bank. Not knowing what to do,
and without sharing confidential information, this bank teller called
the Senate Aging Committee's fraud hotline for guidance. Our staff
advised her to contact the local Area Agency on Aging. With the
Senior$afe program in place, bank tellers all over the country will
know how to respond when situations like this arise in the future.
Regrettably, Federal laws with the important intention of protecting
consumer privacy can make it difficult for financial institutions to
report suspected fraud to the proper authorities.
Our bill would clarify these laws to encourage banks, credit unions,
investment advisors, and broker-dealers to report suspected financial
fraud targeting senior citizens to regulators, law enforcement, or
adult protective services agencies.
A key feature of the bill is the liability protection it provides:
financial institutions and their employees are protected from suit so
long as employees are trained in how to spot and report suspected
financial exploitation; their reports are made in good faith and on a
reasonable basis, and they report to the proper authorities.
Our bill is based on Maine's innovative Senior$afe program, a
collaborative effort by Maine's regulators, financial institutions, and
legal organizations to educate bank and credit union employees on how
to identify and help stop financial exploitation of older Mainers. This
program, pioneered by Maine Securities Administrator Judith Shaw, also
serves as the template for model legislation developed for adoption at
the state level by the North American Securities Administrators
Association, or ``NASAA''. The Senior$afe Act and NASAA's model State
legislation are complementary efforts, and I am pleased that NASAA has
endorsed our bill.
Combating financial abuse of seniors requires regulators, law
enforcement, and social service agencies at all levels of government to
work collaboratively with the private sector. Financial institutions
occupy a critical nexus between fraudsters and their victims, and can
play an important role. Their employees, if properly trained, can be a
first line of defense protecting our seniors from these fraudsters. The
Senior$afe Act encourages financial institutions to train their
employees, and shields them from lawsuits when they make good faith,
reasonable reports of potential fraud to the proper authorities.
I urge my colleagues to support it.
Mr. President, I ask unanimous consent that a letter of support be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
North American Securities
Administrators Association, Inc.,
Washington, DC, October 27, 2015.
Re The Senior$afe Act of 2015.
Senator Susan Collins,
Chairman, Senate Special Committee on Aging, Washington DC.
Senator Claire McCaskill,
Ranking Member, Senate Special Committee on Aging, Washington
DC.
Dear Chairman Collins and Ranking Member McCaskill: On
behalf of the North American Securities Administrators
Association (``NASAA''), I'm writing to express strong
support for your work to better protect vulnerable adults
from financial exploitation through the introduction of the
Senior$afe Act of 2015. Your legislation will better protect
seniors by increasing the likelihood that financial
exploitation targeting the elderly will be identified by
financial services professionals, and by removing barriers
that might otherwise frustrate the reporting of such
exploitation to state securities regulators and other
appropriate governmental authorities.
Senior financial exploitation is a difficult but critical
policy challenge. Many in our elderly population are
vulnerable due to social isolation and distance from family,
caregiver, and other support networks. Indeed, evidence
suggests that as many as one out of every five citizens over
the age of 65 has been victimized by a financial fraud. To be
successful in combating senior financial exploitation, state
and federal policymakers must come together to weave a new
safety net for our elderly, breaking down barriers to
identify those who are best positioned to identify red flags
early on and to encourage reporting and referrals to
appropriate local, county, state, and federal agencies,
including law enforcement.
As you know, state securities regulators, working within
the framework of NASAA, are in the late-stages of our own
concerted effort to bolster protections for elderly investors
at risk of exploitation, including through the development of
model legislation to be enacted by states to promote
reporting of suspected exploitation. While the approaches
contemplated by the recently announced NASAA model
legislation and the Senior$afe Act differ in some respects,
they are complementary efforts, both undertaken with the
shared goal of protecting seniors by increasing the detection
and reporting of elderly financial exploitation.
The SeniorSafe Act consists of several essential features.
First, to promote and encourage reporting of suspected
elderly financial exploitation by financial services
professionals, who are positioned to identify and report
``red flags'' of potential exploitation, the bill would
incentivize financial services employees to report any
suspected exploitation by making them immune from any civil
or administrative liability arising from such a report,
provided that they exercised due care, and that they make
these reports in good faith. Second, in order to better
assure that financial services employees have the knowledge
and training they require to identify ``red flags''
associated with financial exploitation, the bill would
require that, as a condition of receiving immunity, financial
institutions undertake to train certain personnel regarding
the identification and reporting of senior financial
exploitation as soon as practicable, or within one year.
Under the bill, employees who would be required to receive
such training as a condition of immunity include supervisory
personnel; employees who come into contact with a senior
citizen as a regular part of their duties; and employees who
review or approve the financial documents, records, or
transactions of senior citizens as a part of their regular
duties.
The benefits of the types of reporting that the Senior$afe
Act aims to facilitate and encourage are far-reaching.
Elderly Americans stand to benefit directly from such
reporting, because early detection and reporting can minimize
their financial losses from exploitation, and because
improved protection of their finances ultimately helps
preserve their financial independence and their personal
autonomy. Financial institutions stand to benefit, as well,
through preservation of their reputation, increased community
recognition, increased employee satisfaction, and decreased
uninsured losses.
In conclusion, state securities regulators congratulate you
for introducing the Senior$afe Act of 2015. We share and
support the goals of this legislation, and look forward to
working closely with you as the legislation is considered by
the Senate.
Sincerely,
Judith M. Shaw,
NASAA President
and Maine Securities Administrator.
____________________