Parker: Our most vulnerable deserve the utmost financial protection

by State Representative Tan Parker

With over 3 million senior citizens currently residing in Texas and the large baby boomer population aging into retirement, many of us have taken on the responsibility of caring for our elderly parents or relatives. This not only includes making certain they have proper housing, healthcare, and food, but also protecting their financial security.

While the elderly in Texas are vital to the health and wellness of our state, they are also commonly targets for financial abuse. Throughout our state and nation, seniors are a constant target for financial exploitation and abuse, and as that population grows, the threat only grows bigger. Unfortunately, not a week goes by where there is not a case in the news of an elderly individual being swindled out of their hard-earned dollars they have collected over the years.

Older consumers are often targets for financial abuse because they may have significant assets or equity in their homes and often have Social Security or a pension coming to them regularly. They may also be especially vulnerable due to isolation, cognitive decline, physical disabilities, or other health problems. Certain factors also increase the risk or likelihood an elderly person will be the victim of financial abuse or exploitation.

This increased risk for financial exploitation is due in part to seniors having a higher than average net worth, along with an increase in cognitive impairment that comes with age. Nationally about half of people in the 80-plus age range suffer from significant cognitive impairment, which makes the process of making important financial decisions exceedingly difficult. In 2016, an AARP report revealed impairment of financial capacity as one of the earliest indicators of mild cognitive impairment, Alzheimer’s, and other dementias.

It is estimated that seniors are exploited out of over $36 billion per year in the United States. Yet, in recent studies, the Consumer Financial Protection Bureau (CFPB) reported that only 17 percent of seniors actually report having been the victim of financial exploitation and very few cases even come to the attention of family members or protective services. A new law in Texas aims to stop this exploitation by giving financial institutions, securities professionals, dealers and investment advisors more power in the fight against those that would harm seniors.

During the recently concluded 85th Legislative Session, I carried and passed House Bill 3921 to authorize such financial institutions to place holds on individual transactions if the institution suspects financial exploitation is occurring. These institutions do not have the authority to place holds on entire accounts in this instance. The holds can last a maximum of 10 business days, unless an extended hold is requested by a state or federal agency, or a law enforcement agency investigating the suspected financial exploitation. This extended hold can only last for a maximum of 30 business days after the expiration of the initial hold.

If a financial institution believes financial exploitation is occurring they are required to investigate the situation and submit a full report to the Adult Protective Services (APS) division of the Department of Family and Protective Services (DFPS). The law also requires each financial institution to adopt internal policies, programs, plans, or procedures for placing a hold on a transaction involving an account of a vulnerable adult and requires a financial institution to have cause that financial exploitation is occurring before placing a hold on a transaction and beginning the reporting process to help prevent abuse of this law.

This new law took effect on September 1st. House Bill 3921 aims to identify and stop elder financial abuse at the source and to minimize the amount of losses suffered by the elderly and vulnerable adult populations in Texas. By giving the financial institutions that are closest to seniors a stronger ability to curb exploitation, we can minimize and, ultimately, eliminate financial abuse of our elderly population.

As always, it is an honor to serve you in the Texas House of Representatives, and I always welcome your feedback. If you would like to share a thought with me, please feel free to contact me at my Capitol office at 512.463.0688 or by email at [email protected]