Shepherd, who also belongs to a local team dedicated to fighting elder financial abuse, said she has seen the problem first-hand at First U.S. Community. In one case, a handyman was suspected of exploiting an elderly member.

"He was charging a lot of money for what he said he was doing – which, we are not sure he was even doing anything," she recalled.

At one point, the handyman didn't even have the required documentation to cash one of the member's checks. The credit union decided to call law enforcement and adult protective services, but like most member-focused credit unions, there's more to handling these situations than just dialing a phone number, she said.

"What we do is, a lot of times, we'll take our members off to the side without that other individual being there," she explained. "And we'll talk to them. What's it for? What are they doing? Why are they giving these funds? I mean, it's important for a financial institution to really know their members – really know what their patterns are, especially the elderly ones that normally don't use a debit card or they come in to get cash here and there."

In a letter to FINRA, First Community Vice President of Operations Julie Ainsworth questioned the length of the hold.

"Our only real concern is, if the hold is only good for 15 days and then we have to release it, will it really do any good? It takes longer than that for a court order or for [Adult Protective Services] to get involved," she wrote.

The proposed rules don't create an obligation to place holds on accounts, and firms that do would have safe harbor against the repercussions of withholding funds, according to FINRA. But once a hold is in place, the firm would have to conduct an internal review and within two business days notify all parties authorized on the account about the hold and the reason for the hold. Firms would have to keep records of the notifications, according to the filing.

Though the proposed rules allow firms to request a 15 business day extension if their internal reviews support their suspicions of exploitation, Shepherd said starting out at 30 days would be better.

"I would say 30 days would be a lot easier, because once we give it to [Adult Protective Services], it's really their job to determine what this is and to get the sheriff's department [involved]," she told CU Times. "It's out of our hands at that point, and I think that they're so overwhelmed that they really need that extra time."

Opening and maintaining accounts for members who don't want to identify a trusted contact is still allowed, according to the proposed rules, but firms would have to demonstrate that they made a reasonable effort to get the information. Firms also wouldn't have to ask existing members for trusted contact information until they update their accounts in the regular course of business, FINRA noted.

But one catch, Shepherd said, is that sometimes the trusted person is actually the one exploiting the member. Contact with an immediate family member would be the next step in that case, according to FINRA.

That too is raising concerns for several in the industry.

"In the most extreme cases, it is a possibility that FINRA would be requiring a member firm to notify an unknown, potential bad actor – who has nothing to do with the current situation – of a client's vulnerability," wrote Lisa Bleier, who is managing director and associate general counsel for the Securities Industry and Financial Markets Association. "Knowing that, whenever financial exploitation is suspected and a hold is placed on an account, the trusted contact must be notified within the same time frame as the client, and could cause individuals to think twice before providing a contact in writing, especially considering the relatively commonplace scenario where a simple client contact resolves the issue."

Judith Shaw, president of the North American Securities Administration Association, added,

"The issue of contacting an immediate family member implicates privacy concerns and may well serve to exacerbate the very problem it is meant to resolve. Additionally, elderly individuals often are reluctant to reach out to their adult children when it comes to financial issues for fear that their children will place them in a nursing home."

Shaw also said FINRA's rules should require firms to report suspected abuse to FINRA and state regulators. NASAA recently proposed its own model legislative language for state regulators.

Despite the beefs with the proposed rules, most commenters agreed with Shepherd that elder financial abuse is a growing problem.

"A lot of it's over the phone, a lot of times it's just people knocking on the door pretending to be a solar company or whatever," Shepherd said. "They say the best fraud is elder abuse because nine times out of 10, those elders don't have the capacity to be able to stand trial."

Shepherd, who is also a member of a local agency dedicated to fighting this type of crime, added First U.S. Community has been fortunate to have relatively few cases of elder financial abuse. But she's seen case after case in her community.

"It happens every day. It happens all day long," she said.

FINRA staff will next either revise the proposal or file it with the Securities and Exchange Commission for notice and comment, according to a FINRA spokesperson.

Elder Financial Abuse Red Flags

Here are a few signs of elder financial abuse from the National Committee for the Prevention of Elder Abuse that credit unions might notice:

• Account withdrawals or transfers that the member cannot explain.

• Directives to send bank statements and canceled checks somewhere other than the member's home.

• Unusually large withdrawals.

• Frequent transfers between accounts or frequent ATM withdrawals.

• Suspicious signatures on checks or other documents.

• Absence of documentation about financial arrangements.

• Implausible explanations given about the elderly person's finances by the elder or caregiver.

Tellers are often the first people to notice or suspect elder abuse, which can create an uncomfortable situation, Shepherd said. But don't let discomfort be a deterrent, she warned.

"Know your members and don't be scared to ask questions. Don't be scared to get in their business and really ask, 'Why are you doing this?' I think you can benefit a lot from that, and if you don't feel comfortable, bring in a manager," she explained.