The recent federal regulatory reform legislation (S. 2155) included a new Senior Safe Act. Is this different than the Illinois elder financial exploitation training requirements? Are there any additional requirements? What does this mean for our bank?

We do not believe that the Senior Safe Act will bring significant changes for your bank. Because it does not preempt or limit Illinois law, we believe that its protections will be additive to the existing liability protections under Illinois law.

The Senior Safe Act confers somewhat limited protections for banks and other financial companies from being sued for reporting suspected elder exploitation, provided that the reporter has been trained in compliance with the law and is making the report in good faith. However, the law does not require banks to provide elder financial exploitation training; while the training is a prerequisite for immunity, the federal law merely states that financial institutions “may” provide the training to their employees.

Notably, the Senior Safe Act’s immunity is secured only if a report is made by a bank employee who serves “as a supervisor or in a compliance or legal function,” and the employee has received adequate training and makes the disclosure in good faith and with reasonable care. There are several requirements for this training, which must:

“(i) be maintained by the covered financial institution and made available to a covered agency with examination authority over the covered financial institution, upon request . . . .

(ii) instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen;

(iii) discuss the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution; and

(iv) be appropriate to the job responsibilities of the individual attending the training.”

The Illinois elder financial exploitation requirements are not as detailed; its training must “include information on the following subjects: (1) recognizing the indicators of financial exploitation; [and] (2) how to report financial exploitation of older adults.” Consequently, it is possible that an Illinois training course could fail to meet all of the federal law’s requirements, such as a discussion of the “need to protect the privacy and respect the integrity of each individual customer.”

However, even if your bank’s training does not meet the federal law’s requirements, that will not jeopardize your bank’s protections under Illinois law. The federal law states that it does not “preempt or limit any provision of State law,” except to the extent that the federal law provides greater liability protection than a state law.

For resources related to our guidance, please see:

Senior Safe Act, 12 USC 3423(a)(2)(A) (S.2155 § 303A) (“An individual who has received the training described in subsection (b) shall not be liable, including in any civil or administrative proceeding, for disclosing the suspected exploitation of a senior citizen to a covered agency if the individual, at the time of the disclosure (i) served as a supervisor or in a compliance or legal function (including as a Bank Secrecy Act officer) for . . . a covered financial institution; and (ii) made the disclosure (I) in good faith; and (II) with reasonable care.”)

Senior Safe Act, 12 USC 3423(a)(2)(B) (S.2155 § 303A) (“A covered financial institution shall not be liable, including in any civil or administrative proceeding, for a disclosure made by an individual described in subparagraph (A) if (i) the individual was employed by . . . the covered financial institution at the time of the disclosure; and (ii) before the time of the disclosure, each individual described in subsection (b)(1) received the training described in subsection (b).”)

Senior Safe Act, 12 USC 3423(b)(1) (S.2155 § 303A) (“A covered financial institution or a third party selected by a covered financial institution may provide the training described in paragraph (2)(A) to each officer or employee of, or registered representative, insurance producer, or investment adviser representative affiliated or associated with, the covered financial institution who (A) is described in subsection (a)(2)(A)(i); (B) may come into contact with a senior citizen as a regular part of the professional duties of the individual; or (C) may review or approve the financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen.”)

Senior Safe Act, 12 USC 3423(b)(2)(A) (S.2155 § 303A) (“The content of the training that a covered financial institution or a third party selected by the covered financial institution may provide under paragraph (1) shall

(i) be maintained by the covered financial institution and made available to a covered agency with examination authority over the covered financial institution, upon request . . .

(ii) instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen;

(iii) discuss the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution; and

(iv) be appropriate to the job responsibilities of the individual attending the training.”)

Senior Safe Act, 12 USC 3423(b)(2)(B) (S.2155 § 303A) (“Timing. The training under paragraph (1) shall be provided (i) as soon as reasonably practicable; and (ii) with respect to an individual who begins employment, or becomes affiliated or associated, with a covered financial institution after May 24, 2018, not later than 1 year after the date on which the individual becomes employed by, or affiliated or associated with, the covered financial institution in a position described in subparagraph (A), (B), or (C) of paragraph (1).”)

Illinois Financial Exploitation Training Rules, 89 Ill. Adm. Code 271.120(c) (“Current employees and officers of a financial institution on August 1, 2011 who have direct customer contact must satisfactorily complete financial exploitation training by February 1, 2012 and complete refresher training every three years thereafter.”)

Illinois Financial Exploitation Training Rules, 89 Ill. Adm. Code 271.120(a) (“A training program shall minimally include information on the following subjects: (1) recognizing the indicators of financial exploitation; (2) how to report financial exploitation of older adults.”)

Senior Safe Act, 12 USC 3423(c) (S.2155 § 303) (“Nothing in this section shall be construed to preempt or limit any provision of State law, except only to the extent that subsection (a) provides a greater level of protection against liability to an individual described in subsection (a)(2)(A) or to a covered financial institution described in subsection (a)(2)(B) than is provided under State law.”)