With the struggling economy, bank savings among the nation’s population, including seniors, are decreasing and the use of defined benefits is rising. Additionally, Social Security accounts for 30 percent of the average older adult’s income and this figure is growing, he added.
Zdenck said federal research also found that 19 percent of seniors are unbanked; they didn’t have a bank account or participate in any banking services at all. The reason, he said, is that many seniors feared predatory lending, financial fraud, abuse and exploitation.
“[It] surprised me,” he said. The American Association of Patients and Providers (AAPP), a Seattle, Wash.-based organization aimed at promoting more efficient and cost-effective delivery of healthcare services, and the Center for Financial Services Innovation (CFSI), an organization targeting “unbanked” and “underbanked” consumers, such as seniors and low-to-moderate income families and communities, released the figures.
To carry out the research project, a survey of interviews of 14 of the largest banks in the country was conducted. The investigative effort consisted of financial practices research data and expert interviews and relied on the experience of banking practitioners.
“[Researchers learned that] financial institutions had no data on older adult customers,” Zdenck said. “No single bank [the researchers interviewed] developed an array of comprehensive products and services armed at seniors. Services [didn’t] meet the needs of older adults.”
As a consequence, he said government agencies such as the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Federal Reserve System (FRS), the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation (FDIC)’s Consumer Response Center and state banking authorities, the National Credit Union Administration (NCUA), the Small Business Administration (SBA) and the U.S. Department of Commerce worked with the banking, housing, community development and geriatric medicine sectors to address this gaping need.
“[We need to] improve regulations, data collection and law enforcement at the state and federal boards,” Zdenck said. “[We] work with federal regulators to have [aging in place directives] as explicit [as the] CRA [Credit Reinvestment Act] investment and [bank] service test [to motivate banks to invest in low-to-moderate income and disadvantaged communities].
“Our principles [are to] protect older adults from fraud and abuse. [We are constantly] adapting and learning [how to achieve this better]. [We] train bank officials on detecting fraud and abuse. [We get them to] customize financial products and services for older adults. [We get them to] offer transparent, low-cost, low-fee accounts. [We ask them to] expand affordable financial management.”
Zdenck said NNS and other federal agencies must help banks to engage seniors in investigating the government benefits that may support them.
“[We help their customers to] access critical income supports and offer education to older adults,” he said, stating that NNS’ Housing Counseling Network and National Training Academy provides seniors with financial and housing consumer education.
“Financial institutions should have benefit screens. [For example, seniors are] not applying to food stamp programs or SNAP [the federal government’s Supplemental Nutrition Assistance Program] because they don’t know about them.”
Zdenck said that one of the issues raised by seniors about conducting business with banks is their physical accessibility. He said that LEED represents voluntary standards for building designs and the banking, architectural and civil engineering markets responded to the government’s age-friendly banking endeavors with implementing them to accommodate senior customers. As a result of government and business partnerships, most bank branches are now LEED-certified.
“[The development and opening of branch banks is] modeled after LEED building principles,” Zdenck said, explaining that LEED, also known as the Leadership in Energy and Environmental Design program by the U.S. Green Building Council (USGBC) to regulate environmentally correct building and construction.
“[We want to] improve access to bank locations and services [and build and open more] bank branches and online development. [To further physically accommodate seniors, we want to] facilitate aging in the community [with such services as] home repairs and modifications.”
He said that NNS assists banks in providing products and services, offering income supports and benefits and housing counseling to seniors. This has reduced the number of unbanked seniors.