Jan 2, 2007

New law has eyes out for elders

Banks must report financial abuse of seniors

By Kristina Peterson / Daily News Staff Writer

After years of opposition from banks, a new law went into effect Monday that will give senior citizens stepped-up protection against financial abuse.

Authored by state Sen. Joe Simitian, D-Palo Alto, and Assemblywoman Lois Wolk, D-Davis, Senate Bill 1018 requires bank employees to be "mandated reporters" of any financial scams or suspicious circumstances.

Workers in financial institutions will join the ranks of health care professionals, social workers, nursing home workers and clergy, who are already required to report any signs of elder abuse. Those newly accountable parties are not held liable if their suspicions prove unfounded.

Previously, employees "on the frontline" of financial assets were not required to report suspicious circumstances, Simitian said.

"The caregiver who gives your grandmother a sponge bath is a mandated reporter ... but bank tellers were not ... A lifetime of assets can be wiped out in a matter of minutes," Simitian said.

Palo Alto resident Barbara Baxter-Berman, 71, said she thinks the new law will help "vulnerable elders" who "can be scammed, mistreated or worse."

A member of the Raging Grannies Action League, Baxter-Berman cited an incident in which her credit union notified her of several charges made with her card in Florida. "I had been on a trip, but I appreciated their attention to the matter. What if someone else was using my card? Only they would have realized something was wrong," she said.

Jacki Fox Ruby, legislative director of the California Alliance for Retired Americans, said her nonprofit has tracked "alarming proportions" of elder abuse in the state.

The Elder Financial Protection Network estimates that 225,000 seniors are financially abused each year in California. Only one in 100 cases is reported, according to the California Welfare Directors Association.

"As more baby boomers reach senior status, we have to start putting into place practices that ensure we do not have seniors fall into poverty or be scammed into giving up their hard-earned savings," Ruby said.

"This is a particularly significant problem in our area because we have an aging population with accumulated assets," Simitian said. For instance, an engineer who moved to Palo Alto 50 years ago is likely to have a house and "a lifetime of savings. The combination of age and assets makes them very tempting targets," he said.

Simitian first introduced the law in 2004, but it met "very strong opposition from the banks," he said. On its second try, the bill was passed and signed by Gov. Arnold Schwarzenegger in 2005, with a one-year delay built in to give financial institutions time to train their employees.

Keri Bailey, lobbyist for the California Credit Union League, told the Credit Union National Association that the league opposed the original bill because it imposed criminal penalties for individual tellers who failed to report abuse. The enacted law instead imposes a civil penalty by fining the financial institution between $1,000 and $5,000.

In a statement released when the bill was passed, the California Bankers Association said consumers should know that the law will change "the way that banks interact with their senior customers."

"It may become necessary ... to ask senior customers more questions about their transactions to establish whether or not elder abuse may be taking place," the association wrote.

Employees of financial institutions are already mandated reporters in Florida, Georgia and Mississippi.



E-mail Kristina Peterson at kpeterson@dailynewsgroup.com.