Bills Protecting Seniors from Financial Abuse Get Committee Hearing
LANSING — Bills sponsored by Reps. Winnie Brinks (D-Grand Rapids) and Tom Cochran (D-Mason) that would help prevent financial abuse against seniors received a hearing during the House Financial Services Committee and could soon receive a committee vote. The bills were drafted in response to a 2006 Governor’s Elder Abuse Task Force Report, which included a recommendation for financial institutions to better protect their customers from elder abuse by requiring a joint account disclosure. While it is often helpful to have a family member or caretaker added to a joint bank account, an unscrupulous joint account holder can deplete the account for his or her own benefit.
“Joint accounts can help families better manage their money in many situations, but everyone — especially seniors — needs to know the risks of having these accounts,” Brinks said. “These bills will make sure that seniors open these accounts with the knowledge they need to protect their assets. I’m grateful that the House Financial Services Committee took testimony on these bills today, and I look forward to its passage in the House.”
House Bills 5030 (Brinks) and 5031-32 (Cochran) would require banks, savings banks and credit unions to provide the following information to customers in writing when they apply to establish a joint account:
- That each account holder would be the owner of the money in a joint account.
- That each joint account holder would have the authority to deposit or withdraw any or all of the money in a joint account.
- That if one of the owners of a joint account dies, the other owners would continue as the owners of that account and could still access the money.
- That money in a joint account may be subject to the claims of creditors of any joint account holder.
While seniors are especially vulnerable to financial abuse, they aren’t the only ones who need to know about the rights and responsibilities of joint account holders. This legislation would make people aware that joint accounts are also subject to creditors even when the joint account holders are trustworthy. This addition was included in response to a constituent’s situation where one of the joint account holders owed money to the state and the other joint account holder was unaware until the money was removed from the account to resolve the debt.
“Through a simple disclosure, this package of bills makes banking more transparent and secure for seniors and their families,” Cochran said. “It is an easy task for a financial institution to outline the rights of joint account holders, and it will provide families with important information to reduce the risk of fraud or abuse.”