A new law will go into effect July 1 of this year that will allow elderly or vulnerable adults to submit to their bank a list of trusted persons that the bank may contact if it suspects financial exploitation. The ability to have a trusted contact list associated with a customer will be a great addition to the toolbox for fighting elder financial abuse.

The new Virginia Code section 6.2-103.2 will give a bank the ability to offer to an elderly or vulnerable adult customer the opportunity to submit and update a list of trusted persons that the bank is authorized to contact when it has reasonable cause to suspect that its customer is a victim or target of financial exploitation. The law will also allow for training of bank staff on how to identify and report the suspected financial exploitation of an elderly or vulnerable adult, similar to the federal Senior Safe Act.[1] If the requirements of the training are met, banks and their staff will be immune from liability in any civil or administrative proceeding for good-faith disclosures of suspected financial exploitation made with reasonable care. The ability for a customer to maintain a trusted contact list at the bank and financial exploitation training for bank staff are both optional for a bank to implement and are not mandatory. The decision to not implement or complete training requirements does not create new, state-level liability.

Who is an “elderly or vulnerable adult” under the statute? It’s probably younger than you think – it is any person 60 years of age or older, or any person 18 years of age or older who is incapacitated and who resides in the Commonwealth.[2] The trusted contact list of persons can be composed of anyone the customer chooses, including a friend or neighbor, and the trusted contact does not have any authority or ownership related to the bank account. 

Under current law, bank staff with reasonable cause to suspect that an elderly or vulnerable adult is a victim or target of financial exploitation should file a detailed report with law enforcement; the local department of social services of the county or city wherein the elderly or vulnerable adult resides or where the suspected financial exploitation occurs or the adult protective services hotline; and with FinCEN (SAR). If the bank has refused to execute a transaction, delayed a transaction, or refused to disburse funds related to its good faith belief there is financial exploitation, the bank is required to report such refusal or delay within five business days to the local department of social services or the adult protective services hotline.[3]  

Under the new statute, the bank may convey the suspicion of adult financial exploitation to all of the currently authorized parties, plus one or more of the following: (i) any person on the trusted contact list; (ii) a co-owner, additional authorized signatory, or beneficiary on any account that the elderly or vulnerable adult holds with the bank; or (iii) an agent under a valid power of attorney.[4] If the bank is unable to contact any of these permitted recipients and the elderly or vulnerable adult customer is unable to designate a trusted contact, the bank can convey the suspicion of abuse to any person known by the bank to be reasonably associated with the customer, including a family member. The bank should only convey that there is reasonable cause to suspect that the elderly or vulnerable adult customer may be a victim or target of financial exploitation without disclosing any other details or confidential, personal, or financial information to the recipient. The bank may not convey its suspicion of financial exploitation to the suspected perpetrator.

Adult financial exploitation is currently a $27 billion[5] problem nationwide, and the expansion of the number of people a bank can contact with the trusted person statute will be a helpful additional tool for fighting adult financial exploitation in the Commonwealth. 

For more information about this article or other legal banking issues, contact DeMarion Johnston, VBA General Counsel, at djohnston@vabankers.org. This article has been prepared for informational purposes only and is not legal advice.