Good morning. It is an honor to be here today alongside my colleagues who are stalwart champions of our seniors. We are here because we care about making sure that all Americans, throughout their lifespans, can have the opportunity to learn and develop skills, engage in productive work, make sound choices about their daily lives, and participate fully in the life of our communities.
We are experiencing the greying of America, with 45 million people in this country who are age 65 or older and 10,000 more who are turning 65 each day. They are our grandparents, our parents, our neighbors, our friends. And they are living longer, healthier lives than ever before. The average American is now spending about twenty years in retirement. During these years, they are active consumers. They are still taking out and making payments on mortgages; they are still borrowing to buy cars and trucks; they are still accumulating credit card debt; some are even taking out student loans on behalf of their grandchildren. These heavier debt loads, that previous generations did not have, can threaten their economic security.
We have recently come through the worst financial crisis since the Great Depression. Many Americans were shaken in their deeply held belief that if they work hard and act responsibly, they can get ahead and retire securely. Millions lost their jobs, millions lost their homes, and almost all of us lost a substantial chunk of our life savings.
In the aftermath of the crisis, this country had to make a new beginning. The new Consumer Financial Protection Bureau is part of that fresh start. We are very busy addressing key problems in the consumer financial markets, and we are working to create a sustainable marketplace where informed consumers can find value in responsible business practices. Let me briefly describe three ways we are seeking to accomplish these goals.
First, we are cleaning up problems in the financial marketplace through evenhanded oversight and enforcement of the law. So far our enforcement actions have made over $5.3 billion available to millions of consumers, and we have levied hundreds of millions of dollars in penalties. We also are improving the financial markets through balanced regulation. For example, in the largest single consumer financial market in the world – the U.S. mortgage market, worth trillions of dollars – we have adopted sweeping new rules to ensure that the excesses and irresponsible practices that brought about the financial crisis cannot be repeated. That change alone will help safeguard Americans against the kinds of economic dangers and calamities they suffered just a few short years ago.
Second, we are addressing individual problems that arise every day through our consumer response function. To date, we have addressed complaints from over 600,000 consumers. More than 50,000 of them came from consumers who told us they are age 62 or older. Through our complaint process, we have helped return millions of dollars to consumers and we have solved other problems that had been frustrating them for months or even years. Anyone who believes they were mistreated on their mortgage, auto loan, student loan, credit card, or bank account can go to our website at consumerfinance.gov to file a complaint. It is a simple and easy process and typically takes less than fifteen minutes from start to finish.
Third, we are developing powerful new tools for all consumers, including older Americans. For those who feel disempowered by the confusing explanations provided for many financial products, we have created our “Ask CFPB” tool. This interactive database has over a thousand answers to questions most commonly asked by consumers. When you encounter a particular issue, you can go to Ask CFPB to learn more about it and understand your rights.
So in these ways the Consumer Bureau is working on behalf of more than 300 million American consumers. But the law that created our new agency specifically recognized the need to protect older Americans against financial exploitation and promote economic security later in life. With the aging of the baby boomer generation, that mission has never been more important. This is especially so for two central themes of the White House Conference on Aging: retirement security and elder justice. Our Office for Older Americans is dedicated to addressing these issues. It has enjoyed top-flight leadership, first from Hubert Humphrey III and now from Nora Dowd Eisenhower – two individuals who became leaders on these issues at the state level before bringing that same commitment to the federal level at the new Consumer Bureau. Let me describe how we are making progress in both of these areas.
Our Office for Older Americans has done much great work around retirement security. Our team has traveled the country listening to older Americans. Based on what we heard, we issued studies, guides, and advisories to arm seniors and their caregivers with the information and tools they need to protect themselves and their precious retirement savings.
One of our first reports to Congress exposed problems with so-called “senior designation” credentials that many financial advisers use to market their services to older Americans. We identified more than fifty different senior designations that financial advisers use to indicate that they have advanced training or expertise in the financial needs of older consumers. Many of these credentials are flimsy at best, yet they can confuse older consumers, who are already at risk for deception and fraud. Based on those findings, we made recommendations to policy makers to help older consumers by implementing rigorous training standards and increasing supervision and enforcement.
In another report, we found that debt collection is a top complaint for older Americans, just as it is for younger consumers. So we issued a consumer advisory to help older Americans deal with harassing debt collectors. We let them know that their federal benefits are legally protected against these risks, and we explained how they can dispute debts they believe are false or inaccurate.
We have also done much work on reverse mortgages, starting with a comprehensive report on the industry that we published three years ago. We have produced a guide to help consumers assess the pros and cons of this product, and for those who already have a reverse mortgage, we have offered tips on how to plan ahead to avoid financial hardships that may result from certain mortgage terms. We have also analyzed our consumer complaints on reverse mortgages, which showed that many older consumers are quite frustrated with loan terms, servicing runarounds, and foreclosure problems. We are helping many seniors who filed these complaints, and we are prioritizing these issues for oversight and enforcement.
Protecting older consumers also means supporting those who love and take care of them. So we put out a guide to help assisted living and nursing home staff better protect the people in their care by preventing and addressing financial abuse and scams. Many seniors are vulnerable, and our guide helps their caretakers deal with financial mistreatment by family members or others who are handling the finances of an incapacitated adult.
About 22 million people who are age 60 or older have named someone as an agent under a power of attorney to make financial decisions for them – and millions more have court-appointed guardians or other fiduciaries. The vast majority of those designated to serve in these capacities are trying their best to do the right thing, but they often have no training. We have published guides, called “Managing Someone Else’s Money,” to help family members and friends better understand their role in serving as financial caregivers. These guides are written in plain language and are designed to apply to four different types of fiduciaries. Each guide tells them about their duties, how to prevent and respond to financial exploitation and scams, and where to go for additional help.
In partnership with the FDIC, we have also developed resources that provide financial education for older consumers and their caregivers. “Money Smart for Older Adults” uses a train-the-trainer approach that makes it easy for instructors to provide practical guidance for a safe and secure financial future. Instructors can include financial institution staff, senior organizations, adult protective services agencies, law enforcement, and others who serve this population.
In addition to retirement security, the Consumer Bureau also is focused on issues of elder justice. Unfortunately, we have seen that older Americans all too often fall prey to financial exploitation. They make attractive targets because they often have higher household wealth in the form of retirement savings or home equity or both. They may develop impaired capacity and they can be isolated and vulnerable. Recent studies found that financial exploitation is the most common form of elder abuse, but that only a small fraction of incidents is ever reported. I saw this during my time as the Attorney General of Ohio – how a lifetime of savings can be wiped out by falling prey to a scam artist. Our Office for Older Americans is working with a broad spectrum of stakeholders to prevent these things from happening.
We are also bringing enforcement actions to address some of the issues most commonly raised by older American consumers. Two of those issues are mortgage servicing and debt collection. We have taken major actions against Ocwen and Flagstar, two large mortgage servicers, for the same troubles seniors are experiencing. And we have brought numerous enforcement actions for problems in debt collection that are frequently described by older consumers. We have also begun to police reverse mortgage lenders for advertisements that misstate the costs and risks of these sensitive financial products – advertisements we so often see on late-night television.
We are also calling on financial institutions to do their part to help protect older Americans. When seniors fall victim to a scam or to theft by a trusted family member, they may be too embarrassed or too frail to pursue legal action or even to report that they have suffered harm. So it is crucial that other folks are looking out for them too. Financial institutions are especially well-positioned to prevent such fraud. Many older consumers make frequent use of traditional bank and credit union branches and are known personally by the tellers, who often are able to spot irregular transactions, abnormal account activity, or unusual behavior that signals financial abuse.
Preventing elder financial abuse requires coordinated efforts on the national, state, and community level. Financial institutions can and should collaborate with Adult Protective Services, other senior service providers, and law enforcement to keep our seniors safe. Reporting suspected abuse to the appropriate authorities is the right thing to do. Yet there has been confusion about whether federal law permits financial institutions to do this without first informing the consumer and providing an opportunity to opt out. The Consumer Bureau, in collaboration with other financial regulators, has developed guidance to clarify the issue and reassure financial institutions as a general matter that they can and should report suspected financial abuse that victimizes older Americans to all appropriate authorities.
We need to recognize that we all bear responsibility here. Both older Americans and those who look out for them should know how to identify and report the common signs of elder financial abuse. Our “Managing Someone Else’s Money” guides highlight common signs of financial exploitation: funds disappearing from accounts, bills that go unpaid, belongings that are missing. It also points out others that are more subtle: electronic or ATM withdrawals that fly under the radar or a new best friend or acquaintance showing up with power of attorney or being added as a joint account holder.
The Consumer Bureau is encouraging all financial services providers to work with us to focus on the “three Rs”: recognize, record, and report. Those who serve seniors as profitable customers can also share resources effectively to prevent and respond to elder financial abuse. Some credit unions and smaller banks are already following our guidance and sharing our resources to protect seniors. We strongly encourage more institutions to do the same.
The Consumer Bureau was born out of the recent financial crisis, and our work is still in its early stages. But as the American economy recovers, we want consumers of all ages to be able to look ahead with hope and resilience. We want them to know they have a new agency standing on their side and looking out for their interests, to help restore confidence and trust in the consumer financial marketplace. With your help and advice, we are glad to work with you to do that. Thank you.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.