The American Bankers Association Foundation released a new report today on the use and impact of state laws that allow banks to delay transactions when they suspect financial exploitation of an older or vulnerable person. More than half (54.5%) of bank respondents in states with these “hold” laws have used them to prevent elder financial exploitation, according to the ABA Foundation’s survey.
According to the report, about half the states have “hold” laws that allow depository institutions to delay or hold transactions when there is suspected financial exploitation of an elder or “vulnerable” person. Nearly 90% of banks located in states that don’t currently have the law indicated in the survey that having one in place would be beneficial.
The report also examines how the laws are currently implemented, as well as the challenges associated with them and how they can potentially be improved.
“This survey provides an important look at how banks are using hold laws to protect their older customers from financial exploitation,” said Sam Kunjukunju, vice president, consumer education for the ABA Foundation. “States will benefit from the data and testimonials contained in this report, including ideas to make it easier for banks to keep their customers safe.”
Among survey respondents who have utilized a hold law in their state, nearly a quarter (23.8%) said they delay suspicious transactions a few times a month, while others indicated holding transactions monthly (19%), daily (7.1%) or weekly (4.8%). Of the banks in states with these “hold” laws, 52.4% of the respondents also believe longer hold periods and flexibility on specific length are important to appropriately investigate cases and prevent fraud.
About the Survey
The survey was conducted in September 2024 and includes responses from 158 banks, representing 71% of the industry’s number of deposit accounts. Responses represent a range of banks by size and geography.