Can an inquiry made to another FI regarding potential elder abuse fall under the 'money laundering' purpose of 314(b)?

If you honestly believe that it is money laundering going on, then you can. - but at the same time, I would be alert as to what your State laws are on Elder Abuse, and ensure that you are taking the right path there.

If the only activity you are reporting is financial exploitation of the elderly, no. The regulation that implements 314(b) limits appropriate discussions to money laundering and terrorist financing. Fin-2009-G002 suggests a wholesale expansion of appropriate topics to include all "specified unlawful activities" (SUA's).

However, the statutes it refers to do not list financial exploitation of the elderly as an SUA. If the elderly person's money is leaving your institution then classifying the activity as money laundering would be a real stretch...

Ken, I'm going to do the unthinkable and offer a slightly different opinion on this topic.

Elder financial exploitation often co-occurs with other forms of financial crime which are considered predicate offenses and the money laundering statute is sufficiently broad that almost any movement of funds could at least be argued to be part of a scheme. Furthermore, Shasky-Cavalry's remarks with the release of the guidance suggest the spirit of the program covers 314(b) requests made as part of a consumer on consumer fraud or theft investigation.

Personally, I would not hesitate to submit a 314(b) request for an elder abuse case if I thought it'd be useful.

What Information can be Shared Under 314(b)?
Under 314(b), financial institutions or associations of financial institutions may
share information with each other regarding individuals, entiti es, organizations,
and countries for purposes of identifying, and, where appropria te, reportingactivities that may involve possible terrorist activity or money laundering.
FinCEN has issued guidance clarifying that, if 314(b) sharing p articipants
suspect that transactions may involve the proceeds of specified unlawful
activities under money laundering statutes, information related to such
transactions can be shared under protection of the 314(b) safe harbor.3

http://www.fincen.gov/statutes_regs/patriot/pdf/314bfactsheet.pdf


I am going to go with ken on this one.

I think 314(b) is the wrong direction to take this. As a resident of PA (as the original poster appears to be) I can tell you that we are not yet a mandatory reporting state in relation to elder abuse (legislation is pending). As a matter of practice, if I suspect that elder financial abuse is occurring, I will contact the county area agency on aging to make a general report. In most counties, the agency will check on the welfare of the individual and may come back with a release signed by the customer that will allow the agency to request account records.

If you are familiar with the other institution and are able to contact their fraud investigator a carefully worded and discrete conversation may also prove to be worth your time.

Ok. Providing the $5,000 or $25,000 threshold is met, would you consider suspected elder financial exploitation to be a mandatory or voluntary report? If so, why?

FinCEN 2011 - A003 indicates that banks filing SARs regarding financial exploitation of the elderly are filing under one of the triggers that has no dollar threshold:

Consistent with the standard for reporting suspicious activity as provided for in 31 CFR Part 103 (future 31 CFR Chapter X), if a financial institution knows, suspects, or has reason to suspect that a transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction, the financial institution should then file a Suspicious Activity Report.

Ken - I'm not sure that's correct, as both 31 C.F.R. § 1020.320(a)(2)(iii) and 12 C.F.R. § 353.3(a)(4)(iii) include that type of SAR filing as sub-paragraphs of where a $5,000 threshold is required.

My question was to determine if folks are interpreting elder financial exploitation as voluntary since it is not a specific federal crime or predicate offense for money laundering.

On a side note - I think thomasj said it best here - why bother with the 314(b) when you can discuss the issue with the other bank through faster means if you suspect fraud? I believe the regulators issued an interagency statement emphasizing that communicating with other institutions' for that purpose is not a violation of federal privacy laws.

I'm not trying to convince you, just encourage others to do some reading.