On July 29, North Carolina Gov. Pat McCrory signedthe Financial Exploitation of Older Adults bill, which requires allfinancial institutions to report when they suspect someone 65 orolder, or a disabled adult over 18, is being financially exploited.It also protects the liability of those making the good faithreport. Financial institutions may also ask members or customers toprovide a list of trusted persons who could be contacted if fraudis suspected.

The legislation, which passed both the Senate and Houseunanimously, was supported by SECU, the North Carolina Credit UnionLeague, the North Carolina Attorney General's office, the NorthCarolina Bankers Association and others. It takes effect Dec.1.

Sara Trexler, senior vice president/trust services at the $26.7billion State Employees' Credit Union in Raleigh, N.C., said thelegislature authorized a task force in 2011 to recommend changesthat would help combat financial abuse against seniors.

The nation's second largest credit union had previously workedwith the state attorney general and secretary of state back in 2007and 2008 when it started its own reporting initiative and createdtraining programs for employees.

Because SECU was ahead of the curve, the attorney general'sstaff invited SECU to join in the task force's pilot effort andshare its training knowhow.

And, the task force called upon SECU's expertise when revisingthe bill. For example, the law at first allowed any person to makea report, but financial institutions were specifically added tomake it clear they were mandatory reporters sheltered fromliability.

North Carolina is the fifteenth state to include financialinstitutions among those who are mandated to, or voluntarily can,report cases of financial abuse involving the elderly. Severalstates also require training of financial institutionemployees.

Trexler said financial abuse against senior citizens isincreasingly drawing more attention, similar to the way domesticviolence and child abuse gained prominence. Branch employees tendto know members well, she said, and notice when their cash patternschange.

“A typical scenario would be somebody mowing the grass andoffering to do it on a regular basis,” Trexler said. “Soon, thatperson is cashing $500 checks every week. Employees wanted to knowwhat to do. The attorney general's office actually helped us and wealso partnered with Adult Protective Services.”

In another case, a member began asking to withdraw $500 in casheach week. The second time it happened, the teller cautioned herthat it was not a safe practice.

“It turned out she lived next to a halfway house, and residentsthere were walking her to the branch and waiting for her to getcash to give to them,” she said. “She thought they were herfriends.”

Branch employees attempted to alert a family member, but whenfailed, they contacted the Adult Protective Services offices.

Next Page: Scammers' First Stop

Lauren Waley, the NCCUL's director oflegislative and regulatory affairs, said over the past couple yearsthere have been a number of attention-grabbing headlines aboutseniors getting scammed, in some cases involving millions ofdollars. Joint account holders are sometimes found to be theperpetrators.

“It may be a family member or a caregiver who comes into thebranch with them,” Waley said. “The older person may not becomfortable making such a large withdrawal but they're feelingpressure. You see from the expression on the member's face thatthis may not be right. The law now puts a sense of liability on lawenforcement to follow up with these things.”

Financial institutions are the first stop for criminals, Waleysaid.

“Having their involvement is vital. There's definitely abalancing act imposing additional compliance burdens and doingwhat's right. North Carolina is pretty progressive in what weimplemented,” she said.

The new law also clarifies the ability of Protective Services toaccess financial records. Legislators kept in the bill arequirement that access to such records must be obtained by asubpoena or court order.

“The financial world is very attuned to the issue of financialprivacy,” Trexler said. “Training is needed to educate people tothe fact it's okay to raise your hand and say, 'Somebody shouldcheck on this person.' But there's a balance between providing helpand still protecting financial information.”

With the law in place, the next step is to prepare staff atcredit unions throughout the state. The league is sponsoring atrain the trainer event in October, which will be conducted by theConsumer Financial Protection Bureau.

Whaley said materials are readily available to educate bothstaff and members, like the Money Smart for Older Adults programdeveloped by the FDIC and CFPB. A quick check on the Money Smartweb site offers an idea of what legislation such as NorthCarolina's new law is aimed to prevent: schemes directed atveterans, identity theft, medical identity theft, scams that targethomeowners, planning for unexpected life events and beingfinancially prepared for disasters.

The league is also looking to expand the event to includespeakers from North Carolina financial institutions, the Office ofthe Attorney General, the State Bureau of Investigations CrimesInvestigation Division, the North Carolina Department of Health andHuman Services, and representatives from local law enforcementagencies. Whaley said.

The task force will continue its work until May 2015 or until itissues a final report. The goal is to improve the law based onactual experience.