In addition to retirement security, the Consumer Bureau also is focused on issues of elder justice.  Unfortunately, we have seen that older Americans all too often fall prey to financial exploitation.  They make attractive targets because they often have higher household wealth in the form of retirement savings or home equity or both.  They may develop impaired capacity and they can be isolated and vulnerable.  Recent studies found that financial exploitation is the most common form of elder abuse, but that only a small fraction of incidents is ever reported.  I saw this during my time as the Attorney General of Ohio — how a lifetime of savings can be wiped out by falling prey to a scam artist.  Our Office for Older Americans is working with a broad spectrum of stakeholders to prevent these things from happening. 

We are also bringing enforcement actions to address some of the issues most commonly raised by older American consumers.  Two of those issues are mortgage servicing and debt collection.  We have taken major actions against Ocwen and Flagstar, two large mortgage servicers, for the same troubles seniors are experiencing.  And we have brought numerous enforcement actions for problems in debt collection that are frequently described by older consumers.  We have also begun to police reverse mortgage lenders for advertisements that misstate the costs and risks of these sensitive financial products — advertisements we so often see on late-night television. 

We are also calling on financial institutions to do their part to help protect older Americans.  When seniors fall victim to a scam or to theft by a trusted family member, they may be too embarrassed or too frail to pursue legal action or even to report that they have suffered harm.  So it is crucial that other folks are looking out for them too.  Financial institutions are especially well-positioned to prevent such fraud.  Many older consumers make frequent use of traditional bank and credit union branches and are known personally by the tellers, who often are able to spot irregular transactions, abnormal account activity, or unusual behavior that signals financial abuse. 

Preventing elder financial abuse requires coordinated efforts on the national, state, and community level.  Financial institutions can and should collaborate with Adult Protective Services, other senior service providers, and law enforcement to keep our seniors safe.  Reporting suspected abuse to the appropriate authorities is the right thing to do.  Yet there has been confusion about whether federal law permits financial institutions to do this without first informing the consumer and providing an opportunity to opt out.  The Consumer Bureau, in collaboration with other financial regulators, has developed guidance to clarify the issue and reassure financial institutions as a general matter that they can and should report suspected financial abuse that victimizes older Americans to all appropriate authorities. 

We need to recognize that we all bear responsibility here.  Both older Americans and those who look out for them should know how to identify and report the common signs of elder financial abuse.  Our "Managing Someone Else’s Money" guides highlight common signs of financial exploitation:  funds disappearing from accounts, bills that go unpaid, belongings that are missing.  It also points out others that are more subtle:  electronic or ATM withdrawals that fly under the radar or a new best friend or acquaintance showing up with power of attorney or being added as a joint account holder. 

The Consumer Bureau is encouraging all financial services providers to work with us to focus on the "three Rs":  recognize, record, and report.  Those who serve seniors as profitable customers can also share resources effectively to prevent and respond to elder financial abuse.  Some credit unions and smaller banks are already following our guidance and sharing our resources to protect seniors.  We strongly encourage more institutions to do the same.  

CFPB Launches Financial Coaching Initiative

On May 20th, 2015, the Consumer Financial Protection Bureau (CFPB) is launching its Financial Coaching Initiative, targeting recently-transitioned veterans and economically vulnerable consumers to help them with their financial goals. The program places 60 certified financial coaches at organizations around the country to provide individualized educational services.

“Having a trusted, well-informed financial coach can increase your odds of financial success,” said CFPB Director Richard Cordray. “Our project aims to provide financial coaching services at critical points in consumers’ lives, especially as they transition from military service or from being unemployed.”

Millions of consumers are economically vulnerable, including the 49.1 million people living below the poverty line, and the more than 68 million who are financially underserved. These consumers are the most likely to lack access to traditional financial services, which may include products that are more appropriate to their needs and less costly. In-person, individualized and trustworthy guidance can help these consumers make good financial decisions and reach their financial goals.

Roughly 250,000 servicemembers leave active duty every year, and the financial transition into civilian life can be challenging. The Department of Defense offers a Transition Assistance Program (TAP), but many transitioning servicemembers lack experience in money management, and find after they leave the service that they may need help in reworking the financial plan they made while in TAP. At this point a trusted source of financial information and advice could make the difference in a successful transition to a financially stable post-military life.

The CFPB Financial Coaching Initiative helps both veterans who have recently transitioned from active-duty status as well as economically vulnerable consumers seeking other services from social services and other providers. The coaches hired for the program have experience working with the populations they will serve, are trained in financial coaching techniques, and will be accredited by the Association for Financial Counseling and Planning Education.

Sixty diverse partner organizations from around the country have been selected to host the professional financial coaches. The hosts were selected by the CFPB, in partnership with the Department of Labor, after a nationwide search. The sites include various nonprofits, as well as Department of Labor American Job Centers. They provide resources to help people find a job, identify training programs, and gain skills in growing industries. All of the nonprofit organizations selected to host financial coaches for economically vulnerable consumers also provide services that complement financial coaching, such as job training and education, social, and housing services.

The CFPB is the nation’s first federal agency whose sole focus is protecting consumers in the financial marketplace. Using its multiple authorities, including regulation, supervision, enforcement, market research, financial education, and the authority to deal directly with consumer complaints, the CFPB is working to restore trust in consumer financial products and services.

When the CFPB takes enforcement action against a company or person for violating the law, it may impose a civil penalty. That money goes into the CFPB’s Civil Penalty Fund, which is used to compensate victims harmed by those illegal practices. If the CFPB cannot locate victims or it is otherwise not practicable to pay them, it may use the money on consumer education and financial literacy programs. The Financial Coaching Initiative is the first program paid for by the CFPB’s Civil Penalty Fund. Over three years, it’s estimated that tens of thousands of consumers will be served.

More information is at: http://www.consumerfinance.gov/blog/the-launch-of-the-cfpb-financial-coaching-initiative/

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Pages: 1 · 2 · 3

More Articles

• GAO Report Released March 15th, '22 - Women in Management: Women Remain Underrepresented in Management Positions and Continue to Earn Less Than Male Managers
• Department of Justice Issues Annual Report to Congress on its Work to Combat Elder Fraud and Abuse
• Jo Freeman Reviews Electing Madam Vice President by Nichola D. Gutgold
• The US Economy: Small Business Pulse Survey Updates by the US Census
• Consumer Financial Protection Bureau (CFPB): Lenders Cannot Discriminate Based on Sexual Orientation or Gender Identity
• COVID19 Research Sources From the Federal Reserve Banks Including The Black Death in the Malthusian Economy Article
• Help From a Familiar (and revamped) Government Resource: Consumer Financial Protection Bureau Resources For Consumers During Covid-19 Pandemic
• Nichola Gutgold Writes: “Klob-mentum” and the Pronouns To Help
• Biden, Klobuchar Rankings by the Lugar Center Highest Among Presidential Candidates Who Built Bipartisan Collaboration in the Senate
• "Fed Listens", How Does Monetary Policy Affect Your Community? "Our goal is to keep inflation around 2 percent over time"