Banking sector warns bill could lead to hike in cybercrimes against older adults

Rep. Ángel Morey Noble, author of House Bill 147

By THE STAR STAFF

The banking industry issued a warning on Thursday that the elderly population would be more vulnerable to cybercrime if a proposed bill requiring financial institutions to offer customers the option to conduct all transactions online is implemented.

During a public hearing of the House Committee on Banking, Insurance, and Commerce, chaired by New Progressive Party Rep. Jorge “Georgie” Navarro Suárez, both public and private entities voiced their concerns regarding House Bill 147, which seeks to amend the Puerto Rico Banking Act (Act 55-1933) to add the requirement.

“It is well known that the elderly population tends to conduct many of their daily errands and transactions in person, as this is part of their psychosocial well-being and helps maintain their health and mobility,” AARP Puerto Rico State Director José Acarón noted. “There is a human element in personal interaction that can never be replaced by virtual service.”

He pointed out that financial exploitation, identity theft and money laundering are significant threats that this demographic may face, particularly since adults aged 60 and over represent 30% of Puerto Rico’s population. Acarón also referenced a study by Bank Safe, an AARP initiative, which found that older adults value banking services that include personal interaction.

Despite this, the study revealed that nearly 63% of seniors conduct banking transactions online or through mobile applications at least once a week. Acarón emphasized that while digitalization is essential, it should be implemented selectively. To illustrate the point, he noted the home banking service already offered by some banks in the United States, which is specifically designed for individuals over 70 years of age or for those with disabilities who meet certain criteria.

Rep. Ángel Morey Noble, the bill’s author, defended the measure, stating that it aims to facilitate banking services for older adults who experience mobility challenges and have difficulty completing in-person transactions. He noted that he had previously filed a bill with the same intent four years ago, which passed in the House but failed to progress in the Senate.

“The legislative goal is to improve access for older adults,” the lawmaker said. “This initiative comes from constituents over the age of 80, who have faced challenges having their children assist them with banking transactions in branches, especially when they have mobility limitations.”

The Office of the Commissioner of Financial Institutions (OCIF) and the Banks Association of Puerto Rico expressed agreement that the legislation could introduce various risks, ranging from the potential closure of branches of medium or small institutions to an increase in bank fraud.

“This could have an unequal economic impact and put the system’s stability at risk,” OCIF Deputy Commissioner Mónica Rodríguez Villa warned. “Not all financial institutions have the technological infrastructure, economic resources, or necessary risk tolerance to implement platforms that support all their online services.”

Rodríguez Villa suggested that the proposal could be viewed as “undue interference in the free market” and opposed the notion of an absolute mandate for total digitalization. She indicated that the agency might support the bill if amendments were made to eliminate the uniform requirement for complete digitization.

Similarly, Zoimé Álvarez Rubio, president of the Banks Association, reiterated her opposition to the bill, stating that it could jeopardize the health and financial stability of banking institutions. She also cautioned that the requirement could be “impossible and extremely costly,” especially for larger banks.

There are currently nine commercial banks in Puerto Rico, Álvarez Rubio said. While the Office of the Ombudsman agreed to remove the mandatory aspect of the bill, they suggested that its implementation should occur gradually. Reps. Lisie Burgos Muñiz, Emilio Carlo Acosta and Jerry Nieves Rosario also participated in the public hearing.