June 13, 2016

Consumer
Financial
Protection
Bureau
Office for Older Americans An Overview

Note: This document was used in support of a live discussion. As

such, it does not necessarily express the entirety of that
discussion nor the relative emphasis of topics therein.

Disclaimer
This presentation is being made by Consumer Financial Protection
Bureau representatives on behalf of the Bureau. It does not
constitute legal interpretation, guidance or advice of the Bureau.
Note: This document was used in support of a live discussion. As
such, it does not necessarily express the entirety of that discussion
nor the relative emphasis of topics therein.

Consumer Financial Protection Bureau (CFPB)

The mission of the Consumer Financial
Protection Bureau is to make markets for
consumer financial products and services
work for consumers by making rules
more effective, by consistently and fairly
enforcing those rules, and by
empowering consumers to take more
control of their economic lives.

CFPB Office for Older Americans

We help older consumers:

Prevent unfair, deceptive and

abusive practices aimed at
seniors

Make sound financial

decisions as they age

The only office in the federal government specifically dedicated to the

financial well-being of older consumers.
Learn more about us at consumerfinance.gov/older-americans

Office for Older Americans, contd

OA is:

developing education initiatives;

conducting research to identify best practices and effective
methods, tools, technology and strategies to educate and
counsel seniors about personal finance management with a
focus on(1) protecting themselves from unfair, deceptive, and
abusive practices, (2) long-term savings, and (3) planning for
retirement and long-term care.
coordinating efforts with federal and state regulatory agencies,
and law enforcement; and
collaborating with community leaders and local organizations.

Key data points on older Americans

Population: 57 million Americans are age 62 and over17.9% of
population.
Net worth: In 2011, the net worth of households headed by a
consumer age 65 and older was approximately $17.2 trillion, and
the mean net worth was $655,500.
Banking habits: Over 3/4 of households headed by a consumer age
65+ are fully banked. Older households (especially those 70+) are
much more likely to rely on tellers as primary form of banking.
Cognitive impairment: 22% of those over age 70 have mild
cognitive impairment (MCI)

Prevent unfair, deceptive and

abusive practices aimed at
seniors

The problem of elder financial exploitation

Illegal or improper use of an older adults funds, property or assets.
The most common form of elder abuse.
Targeted due to relative wealth, vulnerabilities (e.g. cognitive
impairment).

Elder financial exploitation, continued

Prevalence estimates vary:

4.7% of older adults 60+ living independently report financial

exploitation by someone they live or spend time with (Peterson et al,
2014).
17% of seniors 65+ report being taken advantage of financially
(Investor Protection Trust, 2016).

Estimates of annual losses range from $2.9B to $36.48B.

Under the radar: one study found that only one in 44 cases come to
attention of protective services agencies or programs for victims.

Financial Institutions Advisory

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CFPB Advisory & Recommendations for FIs

Released by CFPB on March 23, 2016.
Office for Older Americans identified best practices to enable
financial institutions to prevent elder financial abuse and intervene
effectively when it occurs
FIs can consider recommendations as they assess their current
practices.
Does not impose any responsibilities or duties on FIs.
Emphasizes importance of compliance, but not intended to interpret
federal consumer financial law or any other statute or rule.

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Overview of recommendations
PROTOCOLS: Develop, implement and maintain internal protocols
and procedures for protecting account holders from elder financial
exploitation.
TRAINING: Train employees regularly and frequently, and tailor
training to specific staff roles.
DETECTION: Harness technologyensure that fraud detection
systems include analyses of types of products and account activity
that may be associated with elder fraud risk.

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Overview of recommendations, continued

REPORTING: Report all cases of suspected exploitation to relevant
federal, state and local authorities; expedite document requests from
agencies investigating reports.
PROTECTION: Comply with EFTA/Reg. E; offer age-friendly
services that enhance protections.
COLLABORATION: Work with law enforcement and adult
protective services, and support coordinated efforts to educate older
account holders, caregivers and the public.

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Find the Advisory and Recommendations

Advisory:
http://files.consumerfinance.gov/f/201603_cfpb_advisory-forfinancial-institutions-on-preventing-and-responding-to-elderfinancial-exploitation.pdf
Recommendations and Report:
http://files.consumerfinance.gov/f/201603_cfpb_recommendatio
ns-and-report-for-financial-institutions-on-preventing-andresponding-to-elder-financial-exploitation.pdf

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OA Initiatives: Money Smart for Older Adults

PROBLEM:

Many older Americans, their caregivers, and others in the

community dont know how to spot and avoid frauds and scams.

CFPB INITIATIVE:

The Office developed an awareness program called Money

Smart for Older Adults: Prevent Financial Exploitation
in collaboration with the FDIC.

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OA Initiatives: Managing Someone Elses Money

CFPB released a set of national guides called

Managing Someone Elses Money in 2013

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Managing Someone Elses Money guides

CHALLENGE:

Declining capacity to handle finances can make older adults vulnerable

People with diminished capacity often need surrogate to handle their money

Lay fiduciaries critical source of help; often have no training; some even commit
fraud

CFPB INITIATIVE:

Released a set of national guides called Managing Someone Elses Money in 2013
User-friendly how-to guides for four types of fiduciaries: agents under powers of
attorney; guardians; trustees; Social Security representative payees and VA
fiduciaries

Links to all guides: www.consumerfinance.gov/managing-someone-elses-money

Bulk orders: http://promotions.usa.gov/cfpbpubs.html#someone

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State-specific guides

Phase 2 of Managing Someone Elses Money initiative:

State-specific guides for six states: AZ, FL, GA, IL, OR, VA

Virginia guides launched August 17, 2015

Florida guides launched September 30, 2015
Oregon guides launched April 20, 2016
Templates and tips for other states launched October,
2015

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Make sound financial decisions as

they age

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Definition
Financial well-being is a state of being wherein a person can
fully meet current and ongoing financial obligations, can feel
secure in their financial future, and is able to make choices that
allow enjoyment of life.
Elements of financial well-being:

1. Having control over day to day, month to month finances

2. Having the capability to absorb a financial shock
3. Being on track to meet financial goals, and
4. Having the financial freedom to make choices that allow one
to enjoy life
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Age differences
The thoughts expressed by working-age Americans and older
Americans about the meaning of financial well-being were
remarkably similar. However, the intended meanings were
different for the two populations.
Older Americans also frequently discussed the decisions and
choices they had made earlier in life, such as saving effectively
or failing to do so, that affect their situation now that they are
older.

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Measuring Financial Well-Being

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Considering a Reverse Mortgage?

Important questions to ask:

Are Borrowers the only ones who live in the home?

Can I afford my living expenses, property taxes, and insurance?

Do I plan to remain in my home for a long time?

Can I wait until Im older?

Consider Alternatives:

Wait (the older a borrower is, the more he or she can borrow)

Refinance your current mortgage

Alternative home equity products might be cheaper

Lower your expenses (consider downsizing to a more

affordable home)
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A Closer Look at Reverse Mortgage Advertising

When you see advertisements, consider these facts:

A reverse mortgage is a home loan, not a government

benefit.

You can lose your home with a reverse mortgage.

Without a good plan, you could outlive your money.

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Consumer Guide: Know Your Financial Adviser

Important questions to ask:

Does the title or certification require college-level coursework?

Do you know how your adviser is paid?

Can you file a complaint if you have a problem?

Is the credential from an accredited organization?

Red Flags:

Educational investment workshops

Freebies like meals and golf trips

High pressure tactics and exaggerated claims (low risk, high return,
act now!)

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Planning for Diminished Capacity and Illness

PROBLEM:

Some people experience diminished financial capacity as

they age or become ill, losing the ability to manage their
money effectively.
With diminished financial capacity, people are more
vulnerable to financial abuse.

CFPB INITIATIVE:

Consumer advisory to help you plan for your financial future.

Tips for giving trusted others the authority to make financial
decisions for you.
Suggestions for organizing and protecting important
documents.
Tips for helping a loved one with diminished capacity.
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Lump-sum payouts and your retirement security

Proceed with caution

Detect and correct errors in your lump sum

calculation

Plan for tax consequences

Make your money last

Protect your money from fraud and scams

Plan ahead

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More CFPB Tools and Resources

Ask CFPB

Interactive online tool with answers to many questions

regarding financial services and products.
Can browse by topics, e.g. fees or closing, or by
populations, like servicemembers, students, and older
Americans.
Under older Americans tag, find answers to questions
about financial products and services, powers of attorney,
accepting assistance with bill-paying and banking, and
tips to avoid financial harm.

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Stay in touch

Nora Dowd Eisenhower

Nora.Eisenhower@cfpb.gov
Visit us at:
consumerfinance.gov/older-americans

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