LANSING — Reps. Winnie Brinks (D-Grand Rapids) and Tom Cochran (D-Mason) introduced legislation today to require financial institutions to provide a disclosure to members opening a joint account. In 2006, the Governor’s Elder Abuse Task Force Report included a recommendation for financial institutions to better protect their customers from elder abuse by requiring a joint account disclosure. Elders are commonly encouraged by others to add another person (usually a relative) to their accounts, which provides the other person with full access to the money in their account. While it is helpful in most situations to have a family member help pay the bills, sometimes relatives or caregivers deplete the account for their own benefit.
“We owe it to our seniors to take steps that will prevent them from abuse and exploitation,” Brinks said. “Simply by making sure a senior understands the ramifications of adding another person to a bank account, they can make an informed decision about their bank information and who to trust with it.”
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.
Senior citizens are not the only victims. In addition, 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 money owed.
“It’s always important for people to understand their rights and obligations, especially when it comes to something as important as their own finances,” Cochran said. “Providing people with information about their banking accounts will enable them to make the best decisions possible about their money.”