Angela Reynolds knew her mother's memory was slipping, but didn't realize how bad things had gotten until she started to untangle her mom's finances: unpaid bills, unusual cash withdrawals, and oddly, the mortgage of the family home had been refinanced at a higher interest rate.

Looking back, Reynolds realizes that her mother was in the early stages of Alzheimer's disease: "By the time we caught on, it was too late."

Reynolds and her mother are among a large group of Americans grappling with the financial consequences of cognitive decline.

A growing body of research shows money problems are a possible warning sign — rather than just the fallout — of certain neurological disorders. This includes a 2020 study from Johns Hopkins University of more than 81,000 Medicare beneficiaries which found that people with Alzheimer's and related dementias started to develop subprime credit up to six years before a formal diagnosis.

The reach of these conditions is enormous. One recent study found that nearly 10% of people over age 65 have dementia; more than twice as many are living with mild cognitive impairment.

Isolated or ill, older adults are more vulnerable to exploitation by scammers or financial abuse from caregivers, say legal and medical experts. Other signs of dementia can include people buying things without reason, piling their homes with unopened boxes while draining down their bank accounts. Or they may impulsively give away large sums of money. This all puts their homes, retirement savings and inheritances at risk.

Missing the signs of declining cognition

One weekday during the spring of 2018, Reynolds sat next to her 77-year-old mother, Jonnie-Lewis Thorpe, in a courtroom in downtown New Haven, Conn. She listened in discomfort as strangers revealed intimate details of their finances in a room full of people, waiting their turn to come before the judge.

Then it hit her: "Wait a second, we're going to have to go up there, and someone's going to be listening to us."

That's because the family home was in foreclosure. The daughter hoped that if she explained to the judge that her mother had Alzheimer's disease, which had caused a series of financial missteps, then she could stop the seizure of the property.

Reynolds can't pinpoint exactly when Alzheimer's crept into her mother's life. A widow, Lewis-Thorpe had lived alone for several years and had made arrangements for her aging, including naming Reynolds as power-of-attorney agent. But, Reynolds lived 450 miles away from New Haven in Pittsburgh, Pa., and wasn't there to see her mom's incremental declines.

It wasn't until Reynolds began reviewing her mother's bank statements that she realized Lewis-Thorpe — once a hospital administrator — had long been in the grip of the disease.

Financial problems are a common reason family members bring their loved ones to the office of Robin Hilsabeck, a neuropsychologist who specializes in cognitive issues at the University of Texas at Austin Dell Medical School.

"The brain is really a network, and there are certain parts of the brain that are more involved with certain functions," said Hilsabeck. "You can have a failure in something like financial abilities for lots of reasons caused by different parts of the brain."

Some of the reasons are due to normal aging, as Reynolds had assumed about her mother. But when a person's cognition begins to decline, the problems can grow exponentially.

Dementia's causes — and sometimes ruthless impact

Dementia is a syndrome involving the loss of cognitive abilities: The cause can be one of several neurological illnesses, including Alzheimer's or Parkinson's, or can result from brain damage such as a stroke or head injury.

In most cases an older adult's dementia is progressive. The first signs often manifest in memory slips along with changes in high-level cognitive skills that deal with organization, impulse control and the ability to plan — all critical for money management. And because the causes of dementia vary, so do the financial woes it can create, says Hilsabeck.

For example, with Alzheimer's comes a progressive shrinking of the brain's hippocampus. That's the catalyst for memory loss which, early in the disease — sometimes before loved ones notice — may result in a person forgetting to pay their bills.

Lewy body dementia is marked by fluctuating cognition: A person veers from very sharp to extremely confused, often within short passages of time. Those with frontotemporal dementia can struggle with impulse control and problem-solving, which could lead to large, spontaneous purchases.

And people with vascular dementia often run into issues with planning, processing and judgment, making them easier to defraud. "They answer the phone, and they talk to the scammers," says Hilsabeck. "The alarm doesn't go off in their head that this doesn't make sense."

Even if without dementia, many people experience mild cognitive impairment, or MCI — a reality that affects 10-20% of people 65 or older. A person can be easily confused, struggle to recall names and have issues with judgment.

Sometimes MCI is just a facet of aging, along with joint pain and graying hair. But it's often the early presentation of diseases such as Alzheimer's or Lewy body dementia. Though they aren't as vulnerable as those with dementia, people with MCI are at heightened financial risk compared to the general population.

"Financial decision making is very challenging cognitively," says Dr. Jason Karlawish, a specialist in geriatrics and memory care at the University of Pennsylvania's Penn Memory Center. "If you have even mild cognitive impairment, you can make mistakes with finances, even though you're otherwise doing generally OK in your daily life."

Some mistakes are irreversible. Despite Angela Reynolds' best efforts on behalf of her mother, the bank foreclosed on the family home in the fall of 2018.

Property records show that Lewis-Thorpe and her husband bought the two-bedroom Cape Cod for $20,000 in 1966. Theirs was one of the first Black families in their New Haven neighborhood. Lewis-Thorpe had planned to pass this asset of generational wealth onto her daughters.

Instead, U.S. Bank owns the property. A 2021 tax assessment lists its value at $203,900.

Financial protections are slow to come

Though she can't prove it, Angela Reynolds suspects that someone had been financially exploiting her mom. At the same time, she feels guilty for what happened to Lewis-Thorpe, who now lives with her: "There's always that part of me that's going to say, 'At what point did it turn, where I could have had a different outcome?'"

Karlawish often sees patients who are navigating financial disasters. What he doesn't see are changes in banking practices or regulations that would mitigate the risks that come with aging and dementia.

"A thoughtful country would begin to say we've got to come up with the regulatory structures and business models that can work for all," he says, "not just for the 30-year-old."

Despite that evidence and the aging of America, the risk-averse financial industry is hesitant to act – partly out of fear of getting sued by clients.

The Senior Safe Act from 2018, the last piece of major legislation to address elder wealth management on the federal level, attempts to address this reticence. It gives immunity to financial institutions in civil and administrative proceedings in instances where employees report possible exploitation of a senior — provided the bank or investment firm has trained its staff to identify exploitative activity.

It's a lackluster policy, says Naomi Karp, an expert on aging and finances who spent eight years as a senior analyst at the Consumer Financial Protection Bureau's Office for Older Americans. That's because the act makes staff training optional, and it lacks oversight.

"There's no federal agency that's charged with covering it or setting standards for what that training has to look like," Karp says. "There's nothing in the statute about that."

One corner of the financial industry that has made modest progress is the brokerage sector, which concerns the buying and selling of securities, such as stocks and bonds. Since 2018, the Financial Industry Regulatory Authority — a non-governmental organization that writes and enforces rules for brokerage firms – has required agents to make a reasonable effort to get clients to name "trusted contacts."

A trusted contact is similar to an emergency contact listed for health care providers. They're notified by a financial institution in the case of concerning activity on a client's account and then receive a basic explanation of the situation. Ron Long, a former director of elder client initiatives at Wells Fargo, gives this example: "It appears [the client] has fallen in love with someone in Belarus, and it appears to be a person who is taking advantage or exploiting."

But the trusted contact has no authority. The hope is that once notified, the named relative or friend will talk to the account holder and prevent further harm. It's a start, but a small one. The low-stakes effort is limited to the brokerage side of operations at Wells Fargo and most other large institutions. The same protection is not extended to clients' credit cards, checking or savings accounts.

A financial industry reluctant to help

When she was at the Consumer Financial Protection Bureau, Naomi Karp and her colleagues put out a set of recommendations for companies to better protect the wealth of seniors. The 2016 report included proposals on employee training and changes to fraud detection systems, such as raising concern over atypical ATM use or adding a new name to an existing checking account

"We would have meetings repeatedly with some of the largest banks, and they gave a lot of lip service to these issues," Karp says. "Change is very, very slow."

Karp has seen some smaller community banks and credit unions take proactive steps to protect older customers — such as comprehensive staff training and improvements to fraud detection software. But there's a hesitancy throughout the industry toward more decisive action, which seems to stem, in part, from fears around liability, she says. Banks are concerned that they might get sued — or at least lose business — if they intervene when no financial abuse has occurred, or a customer's transactions were benign.

Policy solutions that address financial vulnerability also present logistical challenges. Expanding the use of something even as straightforward as the trusted contact program isn't like flipping a light switch, says Long, formerly of Wells Fargo: "You have to solve all the technology issues: Where do you house it? How do you house it? How do you engage the customer to even consider it?"

Still, a trusted contact might have alerted Reynolds much sooner that her mom was developing dementia and needed help.

"I fully believe that [her bank] noticed signs," says Reynolds. "There are many withdrawals that came out of her account where we can't account for the money ... Like, I can see the withdrawals. I can see the bills not getting paid. So where did the money go?"

This story was produced in partnership with KFF Health News and WESA. Support for this reporting came from The Commonwealth Fund, the Association of Health Care Journalists and KFF Health News.