Financial Exploitation Prevention Act Requires Employers Provide Training
Gov. Gretchen Whitmer recently signed Senate Bill 464 into law, creating the Financial Exploitation Prevention Act. The law requires that financial institutions, including banks and credit unions, have a policy and train employees to detect and report financial exploitation of their customers or members to law enforcement or Adult Protective Services (APS). The law also allows the institutions to freeze transactions or assets under certain circumstances.
Financial exploitation defined
Financial exploitation occurs when an individual uses illegal, unauthorized, or improper acts or attempts to use the financial resources of another individual for monetary or personal benefit, profit, or gain.
Financial exploitation also includes the illegal, unauthorized, or improper act of an individual that results or is intended to result in depriving another individual rightful access to or use of benefits, resources, belongings, or assets.
Covered financial exploitation includes the following:
- Intimidation; or
- Improper leveraging of a caregiver relationship.
The law requires financial institutions provide training and procedures concerning vulnerable adults and others including:
- Common types of covered financial exploitation.
- Signs of potential covered financial exploitation.
- Relevant federal guidance on elder financial exploitation.
- Procedures when covered financial exploitation is suspected or detected.
- Procedures when, after examination or investigation, covered financial exploitation is no longer suspected.
- Procedures for delaying or placing a freeze on transactions or assets if covered financial exploitation is suspected or detected.
The law also requires institutions provide procedures for reporting financial exploitation to a law enforcement agency or APS. For help drafting a financial exploitation policy for your financial institution, contact an O’Reilly Rancilio attorney by calling 586-726-1000 or by visiting www.orlaw.com.