What Credit Unions Need to Know About New Elder Financial Exploitation Laws

By Cameron Huddleston, Director of Education and Content, Carefull

A growing number of states are requiring financial institutions to play a role in preventing elder financial exploitation.

Adults 60 and older lose an estimated $28.3 billion every year to elder financial exploitation, according to a report by AARP and NORC at the University of Chicago. The problem is so widespread that states have increasingly been enacting laws to protect older adults.

During the 2023 legislative session, five states enacted laws specifically directing financial institutions and broker-dealers to play a role in preventing financial exploitation. So far in 2024, three more states have enacted similar laws.

As of 2025, more than half of U.S. states and the District of Columbia have laws that mandate or permit financial institutions to report suspected elder financial exploitation to Adult Protective Services, law enforcement, or both. In parallel, the majority of states have enacted laws specifically governing broker-dealers and investment advisers, requiring reporting and allowing temporary delays on suspicious disbursements when exploitation is suspected, according to the North American Securities Administrators Association (NASAA).

Together, these laws signal a clear shift: elder financial exploitation is no longer viewed solely as a social issue, but as a financial-system risk that institutions are expected to help detect and mitigate.

With additional legislation introduced or refined each year, financial institutions must stay aware of evolving requirements and ensure they have systems, training, and tools in place to protect vulnerable account holders while operating within legal safe harbors.

New and Recently Enacted State Legislation

Over the past several legislative cycles, states have continued to strengthen laws that empower financial institutions and broker-dealers to detect and respond to suspected elder financial exploitation. These laws commonly include:

• Authority to delay transactions or disbursements for a defined period when exploitation is suspected
• Mandatory or permissive reporting to Adult Protective Services or law enforcement
• Safe harbor and immunity provisions for institutions and trained employees acting in good faith
• Support for trusted contact frameworks to enable outreach to designated individuals

Recent legislative actions across states such as Connecticut, Georgia, Kansas, Michigan, Nevada, Virginia, Wisconsin, and Wyoming reflect this trend, with laws applying to banks, credit unions, broker-dealers, and investment advisers. While the specifics vary by state such as age thresholds, delay durations, and reporting channels, the direction is consistent: financial institutions are being formally integrated into elder protection frameworks.

Notably, many of these laws explicitly grant immunity from civil liability when institutions delay transactions or disclose concerns in accordance with statutory guidelines removing a major historical barrier to intervention.

Pending Legislation Impacting Financial Institutions and Broker-Dealers

There also is pending legislation in a few states that would impact the role that financial institutions and broker-dealers would have to play in preventing financial exploitation if passed.

California: A bill approved by the California Senate in 2023 clarifies duties of financial institutions as spelled out in the existing Elder Abuse and Dependent Adult Civil Protection Act. Currently, if victims sue their financial institution for assisting with transactions related to scams, institutions can avoid accountability by claiming they did not have actual knowledge of fraud. If signed into law, the legislation would allow victims of financial elder abuse to hold institutions accountable when financial institutions should have recognized transfers as fraudulent but negligently assisted in the transfer anyway.

Illinois: Introduced in February 2024, Senate Bill 3804 amends the Adult Protective Services Act to require broker-dealers and financial institutions to report suspected financial exploitation of disabled adults and adults 60 and older.

Massachusetts: Introduced in 2023, Senate Bill 2460 and House Bill 4124 would require broker-dealers, investment advisors, bank employees and people in a supervisory, compliance or legal position with a financial institution to report suspected financial exploitation of disabled adults and adults 60 and older. They would be allowed to delay transactions for 15 days when exploitation is suspected and would be immune from civil liability for such actions.

New York: A bill introduced in the New York Senate in 2023 would amend an existing law to allow broker-dealers and investment advisers to delay disbursements from accounts of adults 65 and older for 15 to 25 business days if financial exploitation is suspected.

Pennsylvania: House Bill 2064 introduced in February 2024 would allow financial institutions to report suspected financial exploitation of older adults to adult protective services, law enforcement and authorized representatives of older adults and to delay disbursements for 15 to 25 days when exploitation is suspected. Financial institutions would be immune from civil liability for such actions. The bill also authorizes the Department of Aging, Department of Banking and financial services representatives to develop a model training program for financial institutions to detect and report suspected financial exploitation.

Tools to Help Financial Institutions Protect Older Members

Training employees to detect and report suspicious activity can go a long way toward combating elder financial exploitation. However, training alone won’t solve the problem and help financial institutions comply with new legislation. This is where new technology tools can help.

Senior-Specific Technology to Monitor for Fraud and Exploitation

To detect and prevent elder financial exploitation, the Consumer Financial Protection Bureau recommends that financial institutions use technology to monitor for risk factors specific to older adults – which can be different from conventional patterns of suspicious activity.

New platforms such as Carefull have been developed specifically to recognize senior-specific risks. Careful uses advanced technology to monitor financial accounts to determine what is normal for account holders and detects changes in transactional behavior to alert them to suspicious activity.

A Trusted Contacts System

Existing and new laws in several states allow financial institutions to ask members to designate trusted contacts and to contact those trusted contacts when there is suspected financial exploitation.

Financial institutions that aren’t already providing this service should. Done as part of a technology platform, it also gives credit unions an opportunity to connect with those contacts and potentially bring them in as new members. Financial institutions partnering with the Carefull service have a built-in option for members to add trusted contacts to their accounts, including an ability to grant varying levels of view-only permissions. This makes it easier for financial institutions to ensure that their members’ trusted contacts are informed about any potential suspicious activity.

Integrated Content Specifically for Older Members

Education can go a long way toward protecting older members from fraud and exploitation. This includes alerting members to scams, providing articles about staying safe online and avoiding fraud, and offering financial education video courses or webinars.

Through its team of financial journalists and experts, Carefull provides all of this content to its financial institution partners. Carefull creates co-branded microsites for its partners to feature Scam Alerts, articles, and guides.

In addition to senior-specific account monitoring, content, and a trusted contacts system, Carefull provides credit and identity monitoring, home title monitoring, a digital Vault for secure document and password storage, and $1 million in identity theft insurance coverage.

Connect with Carefull to learn more.