Financial Exploitation of the Elderly: New Duties for Credit Unions Under 2022 Virginia Legislation

By Jay Spruill
Woods Rogers Vandeventer Black Law Firm

As of July 1st, credit unions and other financial institutions have new duties in connection with efforts to combat the financial exploitation of the elderly. Financial exploitation affects at least 10% of the elderly population in the U.S. and is a problem that continues to grow.

In seeking to address this problem, the 2022 Virginia General Assembly enacted legislation that:

1. Requires a financial institution to cooperate in any investigation of alleged adult financial exploitation by a local department of social services (“DSS”);
2. Requires a financial institution to make any financial records or information relevant to such an investigation available to DSS upon request;
3. Allows a financial institution to voluntarily provide information or records to DSS or a court-appointed guardian ad litem relevant to a report or investigation for the adult who is the subject of an investigation of financial exploitation; and
4. Provides immunity from civil or criminal liability to a financial institution and its staff for providing information or records as described above.

Thus, for the first time under the law, credit unions are required to provide financial records of a member who is the subject of a DSS investigation of alleged financial exploitation, to DSS upon its request.

Also, a financial institution may voluntarily report suspected financial exploitation of a member to the DSS or a court-appointed guardian litem of the member.

Credit unions would be well-served to incorporate these changes into their policies and procedures in order to comply with the requirements of the new Virginia law and help protect elderly members from financial exploitation.

The 2022 legislation adds to the Virginia laws addressing adult financial exploitation. Specifically, Virginia law has, for some time, provided that a financial institution:

1. May refuse or delay to execute a transaction if it: (i) believes in good faith that the transaction may result in adult financial exploitation or (ii) makes, or has actual knowledge that another person has made, a report to DSS stating a good faith belief that a transaction may result in adult financial exploitation;
2. May continue to refuse or delay such transaction for no more than 30 business days after the transaction was requested unless otherwise ordered by a court;
3. Must report any such refusal or delay to DSS within 5 five business days of the refusal or delay;
4. Can voluntarily make a report of suspected adult financial exploitation, and provide supporting information and records, to DSS; and
5. Has immunity from civil or criminal liability (financial institution and its staff) for providing information or records as described above.

Statutes: Va. Code §6.2-103.1 and §63.2-1606.

Jay Spruill is a member of Woods Rogers’ Banking and Financial Services group. He joined Woods Rogers in 2019 and works out of the firm’s Richmond, Va. office. He focuses on representing depository institutions, finance companies, FinTech companies, and other financial institutions as they navigate the complex laws affecting their business.

Other Resources:

• Suspicious Activity Reports on Elder Financial Exploitation
• The Department of Justice Combats Exploitation, Offers Resources to Protect Older Adults
• Scams Target Older Americans at an Alarming Rate