by. Henry Meier
I recently wrote a blog expressing concerns about proposals placing an affirmative obligation on the part of credit unions to report suspected elder abuse. As pernicious as this problem is, the best way to attackit is to ensure that the law provides adequate protection for those who suspect foul play as opposed to putting more pressure on our front line staff to recognize and act on evidence ofsuspected abuse.
One solution, as highlighted in a recent discussion at the Association’s Legal and Compliance Conference, is to file a SAR. Judging by the statistics, this is becoming an increasingly common practice and provides maximum protection to the credit union reporting the suspected abuse. The problem is that an awful lot of damage can be done between the time a SAR is filed and if and when it is acted on. Fortunately, existing law provides another narrow, but important protection, at least in New York State.
Merrill Lynch Pierce Fenner& Smith, Inc.suspected that one of its account holders suffered from dementia. It even had a letter from her doctor stating that within a month of granting the power of attorney, she lacked the legal capacity to understand what she was doing when she created the document to help manage her affairs. Merrill Lynch refused to honor the delegation of agency power which was granted to an agentin December of 2010and instead a proceeding was commenced under New York’s General Obligation Law under Section 5-1504(2) and 5-1510(2)(i) to compel acceptance. The use ofthe law in this situation puts the onus on a court to ultimately decide if the power of attorney should be recognized.
