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Recommendations for patients with serious mental illness to manage their finances safely and conveniently, with as much dignity, privacy, and autonomy as possible.
Dr Harper is Associate Research Scientist, Program for Recovery and Community Health, Yale University, New Haven, CT.
People with serious mental illness (SMI) and other mental health challenges often face financial difficulties, which can negatively affect well-being, and create barriers to recovery. Often when a patient is struggling financially, a common assumption is that they lack capacity to manage their finances, and financial control may be removed from them. For some, that might mean a conservator is appointed, or a power of attorney arranged. For those whose income is from disability benefits, such as Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), it means finding someone who can be their representative payee. Approximately 20% of SSDI/SSI recipients have a payee, rising to approximately 30% for people qualifying on the basis of a psychiatric disability.1[PDF]
The current system does not offer people with SMI the range of support options that they need to manage their money safely and conveniently, with as much dignity, privacy, and autonomy as possible. While some people need and benefit from having their money controlled by someone else, it is not the answer for many others. Third-party control can risk damaging important relationships, especially if the payee or conservator is a family member, friend, or care provider. Even when people do need support with managing their money, not everyone needs to relinquish control to someone else entirely. Some people’s ability to manage their money fluctuates over time; others are perfectly able to manage some aspects of their finances, but not others.
We have mechanisms in place to provide substituted decision-making around money, but almost nothing to allow for supported financial decision-making. Many people have informal arrangements with family members and friends to get the help they need with managing their money. This can work well, but it can also easily lead to misunderstandings and exposes patients to the risk of financial exploitation and abuse.
Mechanisms have been developed for assessing the capacity of patients who are struggling to manage their money, and researchers have explored which type of support relationships work best for those who need help. Very little consideration, however, has been given to how financial service systems could be utilized to allow for effective shared and supported financial decision-making (“supportive banking”) (Figure).
Everyone needs access to basic banking services to manage their money effectively-to receive money, store it safely, pay bills, spend money throughout the month, and to save and/or borrow for unexpected, or planned, larger-than-normal expenses. People with disabilities are more than twice as likely to be “unbanked”-meaning they do not have a bank account. The number is highest among those with cognitive disabilities.2[PDF] The high rate of being unbanked is partly because people with disabilities are more likely to be poor, and poor people are more likely to be unbanked-but one third of the correlation between disability and being unbanked is specifically due to the disability.
Also troubling is that those who are banked are rarely offered banking services that could facilitate shared and supported financial decision making. People with a conservator or representative payee usually have no formal access to the bank account where their money is stored; they rely entirely on the person controlling their money to disburse funds to them. Some people may set up a joint account with someone they trust, or set up a power of attorney arrangement, both of which give that person full access to their funds. This requires a significant level of trust in the relationship, and even then, such an arrangement can expose the owner of the funds to the risk of exploitation and places a considerable burden of responsibility on the joint account holder or individual given power of attorney.
There is untapped potential for banks to provide better and different services and products to facilitate shared and supported decision-making by using existing technology while maintaining compliance with existing legal and regulatory requirements. Some supportive banking tools are already available, but generally only through independent financial technology (fintech) companies rather than mainstream banks. For example, specialty debit cards aimed at parents of children or adult children of elderly parents, such as those offered by TrueLink and Greenlight, allow them to give their loved one a degree of financial independence through a card with customizable spending controls.
Currently these cards are aimed at people who have legal control over another person’s finances, but the technology could be adapted to keep the financial control in the hands of those who seek to maintain some independence but at times still benefit from supported decision-making. Another fintech tool, EverSafe, aimed at the elderly population, enables users to allow a trusted friend or family member to view their bank accounts, and receive alerts about specific spending behaviors, but not to actually move any money. This type of “alert” technology could be very useful for people with SMI who may be struggling with increased impulsivity or memory problems leading to financial difficulties.
One significant limitation with these technologies is that they require a monthly or one-time payment and depend on reliable internet access, limiting their accessibility, particularly for people with very low incomes. Ideally, banks should offer similar supportive banking features for free as part of the menu of financial services that they offer to customers.
Banking for All, a report co-authored by the Yale University Law School’s Community and Economic Development Clinic (CECD) and the Psychiatry Department’s Program for Recovery and Community Health (PRCH), recommends three specific tools that all banks should provide as a first step towards offering services that meet the needs of people with SMI.3[PDF] First, all banks should offer customizable mobile banking notifications, allowing customers to create an alert, to be sent by text/email, triggered by particular types of spending behavior (amount, time, place). A number of banks do already offer alerts, but they are usually not customizable to the extent they should be, and they are not specifically marketed as a supported banking feature.
Second, banks should enable customers to create self-imposed spending limits on their own accounts-not simply limiting ATM withdrawals, but actually limiting the amount that can be spent using a debit card within a specified time period. Greenlight and Truelink cards use technology that enables detailed customized spending limits of this nature. Monzo, a new bank that started in the UK and has recently started operations in the US, offers a range of options for customers to receive notifications about and set limits on spending behavior, and to communicate with others, for example through shared savings goals.
Third, banks should allow customers to designate a third party to have view-only access to their account. That person would have separate credentials to be able to log in, call, or go in person to the bank to view account activity, but would not be able to move money in or out of the account. Many banks already offer view-only access to business customers, but very few offer it to non-business customers. The Bank of American Fork in Utah offers view-only access, as part of its age-friendly banking options. Wells Fargo offers view-only access, but the service is poorly marketed. TD Bank also offers view-only access to customers but requires that the viewer have power-of-attorney, which limits its usefulness to those unwilling to create that formal arrangement.
The products and services described above should be the norm at all financial institutions. There is broad, global recognition of how important it is for patients with psychiatric illness to be as independent as possible in making decisions about their lives, which includes enabling them to have shared and/or supported decision-making arrangements when necessary. This should also be true when it comes to making financial decisions, and financial institutions should be required to offer services that accommodate their particular needs.
The products and services that we have described here would not only enable people with SMI to manage their money more effectively, but also be useful for all bank customers. Just as the ‘cutaway curb’ for wheelchair users has made it much easier for all pedestrians to navigate streets and sidewalks, so banking designed to accommodate the needs of people with SMI will make it easier for all customers to manage their money well.
Harper A, Rowe M. Environment-Level Strategies to Support Independent Control of Finances: A Response to the SSA Review of Financial Capability Determination Review. Psychiatr Serv. 2017;68:6-8.
Harper A. Financial Management Support for SSA Beneficiaries: Looking Beyond the Payee. Working Paper 2018-5. Chestnut Hill, MA: Center for Retirement Research at Boston College. 2018.
Holkar M. Seeing through the fog: how mental health problems affect financial capability. Money and Mental Health Policy Institute. January 24, 2017.
The author reports no conflicts of interest concerning the subject matter of this article.
1. Social Security Administration. Annual Statistical Report on the Social Security Disability Insurance Program, 2016.https://www.ssa.gov/policy/docs/statcomps/di_asr/2016/di_asr16.pdf. Accessed October 11, 2019.
2. Goodman N, Morris M. Banking Status and Financial Behaviors of Adults With Disabilities: Findings from the 2015 FDIC National Survey of Unbanked and Underbanked Households. April 25, 2017. https://www.fdic.gov/householdsurvey/2017/2017report.pdf. Accessed October 11, 2019.
3. Farr B, Cash B, Harper A. Banking for All: Why Financial Institutions Need to Offer Supportive Banking Features. Yale Law School/Yale Department of Psychiatry. April 2019. https://www.nationaldisabilityinstitute.org/wp-content/uploads/2019/06/cedc-report-april2019.pdf.