HARRISBURG, Pa. — Lawmakers in Pennsylvania are grappling with a rise in financial exploitation of senior citizens as the 2023-24 legislative session winds down. In a recent joint hearing of the Senate Aging & Youth Committee and the Banking & Insurance Committee, fraud analyst Lauren Greenaway testified about a particularly troubling case: a suspect with legal power of attorney over an elderly woman allegedly stole more than $60,000 and has so far eluded justice.
Ms. Greenaway, who works at a central Pennsylvania credit union, explained that the victim considered the suspect an “adopted nephew,” granting him authority over her finances. However, once he gained control, he allegedly pocketed the proceeds from the sale of her home, prompting Ms. Greenaway to describe him as “catch me if you can.” His continued ability to evade law enforcement underscores the difficulties facing lawmakers—and financial institutions—when unauthorized or suspicious activity arises under a legitimate power of attorney.
In the same hearing, legislators debated a measure that would make financial institutions “mandated reporters” of potential elder financial abuse. A bill passed by the House earlier in the year would impose a potential $10,000 fine per violation if suspicious activity goes unreported. Yet banking representatives, such as Ed Martel of Jonestown Bank & Trust, noted the gray area financial institutions can face when dealing with an account holder’s wishes versus mandated reporting obligations.
Sen. Lisa Baker (R-Luzerne) questioned whether banks might be compelled to report any unusual activity under a valid power of attorney, while Sen. Judy Ward (R-Blair), chair of the Aging & Youth Committee, emphasized the need to update the Older Adult Protective Services Act. Meanwhile, Sen. Judy Schwank (D-Berks) voiced her belief that, despite the complexities, the Legislature has heard enough and should take action on reintroducing the bill for early passage in January.
Pennsylvanias History of Power of Attorney Abuse
Pennsylvania courts have consistently held that a person granted power of attorney must act in the principal’s best interests. Under Title 20 of the Pennsylvania Consolidated Statutes, agents owe a fiduciary duty to the individuals who grant them power of attorney (see 20 Pa.C.S. § 5601(e)). Courts can and have imposed civil and criminal liability for breaches of this duty. In In re Estate of Rosenthal, 697 A.2d 1301 (Pa. Super. Ct. 1997), the Superior Court upheld sanctions against an agent found to have exploited an elderly principal’s assets.
The new legislative push to designate financial institutions as “mandated reporters” mirrors similar measures from past sessions. In fact, proposals like House Bill 1423 (in a prior session) sought to empower banks and credit unions to intervene more proactively when red flags appear. Historically, Pennsylvania courts have supported safeguarding the finances of vulnerable older adults, as seen in In re Niccoli, 472 A.2d 273 (Pa. Super. Ct. 1984), where the court reaffirmed the legal system’s commitment to thwarting financial harm to incapacitated persons.
If enacted, mandated reporting requirements would make banks and credit unions central watchdogs against potential abuse, though observers have noted the tension between respecting an individual’s legal autonomy and ensuring they are not exploited. Cases like In re Estate of Purcell, 209 A.3d 1086 (Pa. 2019), illustrate that while a valid power of attorney grants significant latitude to the agent, Pennsylvania’s courts can and do intervene when that power is misused.
