COLOMBIA – South Carolina’s financial institutions may soon have the power to freeze withdrawals from accounts linked to vulnerable adults who are victims of fraud – a crime that robs billions of people every year.
A bill sponsored by state senator Thomas Alexander, R-Walhalla, exempting financial institutions and their employees from facing punishment after reporting when such abuse may be occurring is being referred by the General Assembly, supported by law enforcement agencies, the attorney general of the state and industry leaders.
“This legislation just adds another layer of subordination to us,” Jonathan Williams, who works in the securities division of the state attorney general, told a Senate Veterans and Family subcommittee during a February 17 hearing.
The language in the measure also obliges institutions to disclose possible financial abuses to police authorities. If lawmakers approve the proposal, South Carolina will join 14 other states that require such disclosure.
An amendment has been added that extends protection to apply to money lending entities where a deposit may not occur, such as asset management companies.
The state code defines vulnerable adults as people over 18 with a “physical or mental condition that substantially prevents a person from adequately providing their own protection”.
More than two-thirds of all bank deposits across the country are linked to accounts of people at least 50 years of age, and by 2030, that demographic group will have an accumulated equity of $ 18 trillion, according to data from the Association American Pensioners.
In 2017, the financial exploitation of vulnerable adults accounted for estimated losses of $ 1.7 billion, according to the Consumer Financial Protection Bureau.
“There is a need for many tools out there, not just for law enforcement and state agencies, but also for entities that deal with them (clients) on the front end,” said Neal Rashley Jr., senior vice president at South Carolina Bankers Association.
Williams said that once a bank, credit union or other creditor delays or freezes a withdrawal in accordance with the law, this gives investigators 55 days to examine the matter.
The authorities said the schemes could range from sophisticated online scams to a more direct approach.
“Particularly at community banks, you will get to know your customers,” said Rashley. “You start to see an unusual level of disbursement or transfers for a person with a fixed income”, for example, which could be a warning sign.
Members voted unanimously on the measure for the full action committee.
“I was raised in a house with several generations, and my great grandmother was used financially years ago. We didn’t have resources as a family, so I support that, ”said state senator Penry Gustafson, R-Camden.
Follow Adam Benson on Twitter @ AdamNewshound12.