Seven federal regulators issued guidance on Tuesday to clarify that privacy provisions of the Gramm-Leach-Bliley Act do still allow for financial institutions to report suspected elder financial abuse.

The Gramm-Leach-Bliley Act generally requires that a financial institution notify consumers and give them an opportunity to opt out before nonpublic personal information is provided to a third party. The new guidance clarifies that it is generally acceptable under the law for financial institutions to report suspected elder financial abuse to local, state or federal agencies. Specific privacy provisions of the Act and its implementing regulations allow the sharing of this type of information without complying with standard notice and opt-out requirements.

The guidance was issued jointly by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of Comptroller of the Currency, and the Securities and Exchange Commission. Employees of financial institutions may be able to spot irregular transactions, account activity, or behavior that signals financial abuse, it says.

The agencies point out that Suspicious Activity Reports filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, a tool for combating money laundering and terrorist financing, are also intended as a means  to alert authorities to elder abuse.

The following are specific exceptions to the Gramm-Leach-Bliley Act's notice and opt-out requirements:

To comply with federal, state, or local laws, rules and other applicable legal requirements, such as state laws that require reporting by financial institutions of suspected abuse.

To respond to a civil, criminal, or regulatory investigation.

To protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability. This exception would allow a financial institution to disclose nonpublic personal information to authorities in order to report incidents that result in taking an older adult's funds without actual consent, or report incidents of obtaining an older adult's consent to sign over assets through misrepresentation of the intent of the transaction.

For an investigation, on a matter related to public safety.

With the consumer's consent or consent of the consumer's legal representative.

Possible triggers for filing a Suspicious Activity Report include: erratic or unusual banking transactions, or changes in banking patterns; frequent large withdrawals, including daily maximum currency withdrawals from an ATM; debit transactions that are inconsistent for the older adult; uncharacteristic attempts to wire large sums of money; or closing of CDs or accounts without regard to penalties.

Further information about the use of Suspicious Activity Reports to report suspected elder financial exploitation is available in FinCEN's “The SAR Activity Review” published in May 2013.