By Donya Parrish, MCU VP- Risk Management

It’s October 1, and that means SB 311 is effective. Why is that a big deal? The Montana legislature passed that bill earlier this year to provide financial institutions, including credit unions, the ability to feel more comfortable investigating and reporting elder financial exploitation. A few of the new tools are described below:

Third Party Notification

Credit unions now have the option to “notify any third party reasonably associated with an older person” if the credit union believes that financial exploitation is occurring, has or may have occurred, is being attempted, or has been or may have been attempted. This is a much-needed tool in many situations where you know other family members and are concerned about reaching out them due to financial privacy.

The list of third parties includes, but is not limited to the following:

• a parent, spouse, adult child, sibling, or other known family member or close associate;
• an authorized contact provided by an older person to the financial institution;
• a co-owner, additional authorized signer, or beneficiary of an older person’s account; and
• an attorney in fact (POA), trustee, conservator, guardian, or other fiduciary who has been selected by the older person, a court, a governmental agency, or a third party to manage some or all of the financial affairs of the older person.

Your credit union should never contact any third party suspected of being involved in the financial exploitation and  your credit union protocol should specify who will make the determination of when to reach out, as well as who the best third party might be in each case.

Delaying Transactions

A helpful new feature of Montana SB 311 is the ability to delay transactions that you suspect may involve fraud or exploitation of an older person. Your credit union may, but is not required to, delay completion or execution of a transaction involving an account of an older person if either of the following conditions apply:

• your credit union reasonably believes that the requested transaction may result in financial exploitation of an older person; or
• an agency (i.e. Adult Protective Services) provides information demonstrating to your credit union that it is reasonable to believe that financial exploitation is occurring, has or may have occurred, is being attempted, or has been or may have been attempted.

The transaction may be delayed for up to 15 business days, unless your credit union determines earlier that the transaction will not result in financial exploitation. The delay may be extended to 25 business days (from the date of original delay) if a request from a covered agency (i.e. APS) is received. A court order may also extend or shorten a delay.

Notice of Delay

When your credit union chooses to delay a transaction involving an older person, a written notice must be sent no later than two business days after the transaction is delayed. The notice must include the reason for the delay and be sent to “all parties authorized to transact business on the account for which the financial institution has contact information”… unless a party is believed to have engaged in attempted financial exploitation of the older person.

Training Resources

We have a special issue of the  Compliance Vault dedicated to this topic, as well as an updated webinar your team can access on demand. Find both on our Compliance Training Tools page under the topic of ‘Elder Financial Exploitation’ and let me know if you have any questions.