Bill Text: TX HB3921 | 2017-2018 | 85th Legislature | Enrolled
Bill Title: Relating to the financial exploitation of certain vulnerable adults.
Spectrum: Slight Partisan Bill (Republican 6-3)
Status: (Passed) 2017-06-01 - Effective on 9/1/17 [HB3921 Detail]
Download: Texas-2017-HB3921-Enrolled.html
H.B. No. 3921 |
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relating to the financial exploitation of certain vulnerable | ||
adults. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by | ||
adding Chapter 280 to read as follows: | ||
CHAPTER 280. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL | ||
EXPLOITATION | ||
Sec. 280.001. DEFINITIONS. In this chapter: | ||
(1) "Department" means the Department of Family and | ||
Protective Services. | ||
(2) "Exploitation" means the act of forcing, | ||
compelling, or exerting undue influence over a person causing the | ||
person to act in a way that is inconsistent with the person's | ||
relevant past behavior or causing the person to perform services | ||
for the benefit of another person. | ||
(3) "Financial exploitation" means: | ||
(A) the wrongful or unauthorized taking, | ||
withholding, appropriation, or use of the money, assets, or other | ||
property or the identifying information of a person; or | ||
(B) an act or omission by a person, including | ||
through the use of a power of attorney on behalf of, or as the | ||
conservator or guardian of, another person, to: | ||
(i) obtain control, through deception, | ||
intimidation, fraud, or undue influence, over the other person's | ||
money, assets, or other property to deprive the other person of the | ||
ownership, use, benefit, or possession of the property; or | ||
(ii) convert the money, assets, or other | ||
property of the other person to deprive the other person of the | ||
ownership, use, benefit, or possession of the property. | ||
(4) "Financial institution" has the meaning assigned | ||
by Section 277.001. | ||
(5) "Vulnerable adult" means: | ||
(A) an elderly person as that term is defined by | ||
Section 48.002, Human Resources Code; | ||
(B) a person with a disability as that term is | ||
defined by Section 48.002, Human Resources Code; or | ||
(C) an individual receiving services as that term | ||
is defined by rule by the executive commissioner of the Health and | ||
Human Services Commission as authorized by Section 48.251(b), Human | ||
Resources Code. | ||
Sec. 280.002. REPORTING SUSPECTED FINANCIAL EXPLOITATION | ||
OF VULNERABLE ADULTS. (a) If an employee of a financial | ||
institution has cause to believe that financial exploitation of a | ||
vulnerable adult who is an account holder with the financial | ||
institution has occurred, is occurring, or has been attempted, the | ||
employee shall notify the financial institution of the suspected | ||
financial exploitation. | ||
(b) If a financial institution is notified of suspected | ||
financial exploitation under Subsection (a) or otherwise has cause | ||
to believe that financial exploitation of a vulnerable adult who is | ||
an account holder with the financial institution has occurred, is | ||
occurring, or has been attempted, the financial institution shall | ||
assess the suspected financial exploitation and submit a report to | ||
the department in the same manner as and containing the same | ||
information required to be included in a report under Section | ||
48.051, Human Resources Code. The financial institution shall | ||
submit the report required by this subsection not later than the | ||
earlier of: | ||
(1) the date the financial institution completes the | ||
financial institution's assessment of the suspected financial | ||
exploitation; or | ||
(2) the fifth business day after the date the | ||
financial institution is notified of the suspected financial | ||
exploitation under Subsection (a) or otherwise has cause to believe | ||
that the suspected financial exploitation has occurred, is | ||
occurring, or has been attempted. | ||
(c) A financial institution that submits a report to the | ||
department of suspected financial exploitation of a vulnerable | ||
adult under Subsection (b) is not required to make an additional | ||
report of suspected abuse, neglect, or exploitation under Section | ||
48.051, Human Resources Code, for the same conduct constituting the | ||
reported suspected financial exploitation. | ||
(d) Each financial institution shall adopt internal | ||
policies, programs, plans, or procedures for: | ||
(1) the employees of the financial institution to make | ||
the notification required under Subsection (a); and | ||
(2) the financial institution to conduct the | ||
assessment and submit the report required under Subsection (b). | ||
(e) The policies, programs, plans, or procedures adopted | ||
under Subsection (d) may authorize the financial institution to | ||
report the suspected financial exploitation to other appropriate | ||
agencies and entities in addition to the department, including the | ||
attorney general, the Federal Trade Commission, and the appropriate | ||
law enforcement agency. | ||
Sec. 280.003. NOTIFYING THIRD PARTIES OF SUSPECTED | ||
FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. If a financial | ||
institution submits a report of suspected financial exploitation of | ||
a vulnerable adult to the department under Section 280.002(b), the | ||
financial institution may at the time the financial institution | ||
submits the report also notify a third party reasonably associated | ||
with the vulnerable adult of the suspected financial exploitation, | ||
unless the financial institution suspects the third party of | ||
financial exploitation of the vulnerable adult. | ||
Sec. 280.004. TEMPORARY HOLD ON TRANSACTIONS IN CERTAIN | ||
CASES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. | ||
(a) Notwithstanding any other law, if a financial institution | ||
submits a report of suspected financial exploitation of a | ||
vulnerable adult to the department under Section 280.002(b), the | ||
financial institution: | ||
(1) may place a hold on any transaction that: | ||
(A) involves an account of the vulnerable adult; | ||
and | ||
(B) the financial institution has cause to | ||
believe is related to the suspected financial exploitation; and | ||
(2) must place a hold on any transaction involving an | ||
account of the vulnerable adult if the hold is requested by the | ||
department or a law enforcement agency. | ||
(b) Subject to Subsection (c), a hold placed on any | ||
transaction under Subsection (a) expires on the 10th business day | ||
after the date the financial institution submits the report under | ||
Section 280.002(b). | ||
(c) The financial institution may extend a hold placed on | ||
any transaction under Subsection (a) for a period not to exceed 30 | ||
business days after the expiration of the period prescribed by | ||
Subsection (b) if requested by a state or federal agency or a law | ||
enforcement agency investigating the suspected financial | ||
exploitation. The financial institution may also petition a court | ||
to extend a hold placed on any transaction under Subsection (a) | ||
beyond the period prescribed by Subsection (b). A court may enter | ||
an order extending or shortening a hold or providing other relief. | ||
(d) Each financial institution shall adopt internal | ||
policies, programs, plans, or procedures for placing a hold on a | ||
transaction involving an account of a vulnerable adult under this | ||
section. | ||
Sec. 280.005. IMMUNITY. (a) An employee of a financial | ||
institution who makes a notification under Section 280.002(a), a | ||
financial institution that submits a report under Section | ||
280.002(b) or makes a notification to a third party under Section | ||
280.003, or an employee who or financial institution that testifies | ||
or otherwise participates in a judicial proceeding arising from a | ||
notification or report is immune from any civil or criminal | ||
liability arising from the notification, report, testimony, or | ||
participation in the judicial proceeding, unless the employee or | ||
financial institution acted in bad faith or with a malicious | ||
purpose. | ||
(b) A financial institution that in good faith and with the | ||
exercise of reasonable care places or does not place a hold on any | ||
transaction under Section 280.004(a)(1) is immune from any civil or | ||
criminal liability or disciplinary action resulting from that | ||
action or failure to act. | ||
Sec. 280.006. RECORDS. To the extent permitted by state or | ||
federal law, a financial institution shall provide, on request, | ||
access to or copies of records relevant to the suspected financial | ||
exploitation of a vulnerable adult to the department, a law | ||
enforcement agency, or a prosecuting attorney's office, either as | ||
part of a report to the department, law enforcement agency, or | ||
prosecuting attorney's office or at the request of the department, | ||
law enforcement agency, or prosecuting attorney's office in | ||
accordance with an investigation. | ||
SECTION 2. The Securities Act (Article 581-1 et seq., | ||
Vernon's Texas Civil Statutes) is amended by adding Section 45 to | ||
read as follows: | ||
Sec. 45. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL | ||
EXPLOITATION. A. In this section: | ||
(1) "Department" means the Department of Family and | ||
Protective Services. | ||
(2) "Exploitation," "financial exploitation," and | ||
"vulnerable adult" have the meanings assigned by Section 280.001, | ||
Finance Code. | ||
(3) "Securities professional" means an agent, an | ||
investment adviser representative, or a person who serves in a | ||
supervisory or compliance capacity for a dealer or investment | ||
adviser. | ||
B. If a securities professional or a person serving in a | ||
legal capacity for a dealer or investment adviser has cause to | ||
believe that financial exploitation of a vulnerable adult who is an | ||
account holder with the dealer or investment adviser has occurred, | ||
is occurring, or has been attempted, the securities professional or | ||
person serving in a legal capacity for the dealer or investment | ||
adviser shall notify the dealer or investment adviser of the | ||
suspected financial exploitation. | ||
C. If a dealer or investment adviser is notified of | ||
suspected financial exploitation under Subsection B of this section | ||
or otherwise has cause to believe that financial exploitation of a | ||
vulnerable adult who is an account holder with the dealer or | ||
investment adviser has occurred, is occurring, or has been | ||
attempted, the dealer or investment adviser shall assess the | ||
suspected financial exploitation and submit a report to the | ||
Securities Commissioner, in accordance with rules adopted under | ||
Subsection N of this section, and the department in the same manner | ||
as and containing the same information required to be included in a | ||
report under Section 48.051, Human Resources Code. The dealer or | ||
investment adviser shall submit the reports required by this | ||
subsection not later than the earlier of: | ||
(1) the date the dealer or investment adviser | ||
completes the dealer's or investment adviser's assessment of the | ||
suspected financial exploitation; or | ||
(2) the fifth business day after the date the dealer or | ||
investment adviser is notified of the suspected financial | ||
exploitation under Subsection B of this section or otherwise has | ||
cause to believe that the suspected financial exploitation has | ||
occurred, is occurring, or has been attempted. | ||
D. A dealer or investment adviser who submits a report to | ||
the department of suspected financial exploitation of a vulnerable | ||
adult under Subsection C of this section is not required to make an | ||
additional report of suspected abuse, neglect, or exploitation | ||
under Section 48.051, Human Resources Code, for the same conduct | ||
constituting the reported suspected financial exploitation. | ||
E. Each dealer and investment adviser shall adopt internal | ||
policies, programs, plans, or procedures for the securities | ||
professionals or persons serving in a legal capacity for the dealer | ||
or investment adviser to make the notification required under | ||
Subsection B of this section and for the dealer or investment | ||
adviser to conduct the assessment and submit the reports required | ||
under Subsection C of this section. The policies, programs, plans, | ||
or procedures adopted under this subsection may authorize the | ||
dealer or investment adviser to report the suspected financial | ||
exploitation to other appropriate agencies and entities in addition | ||
to the Securities Commissioner and the department, including the | ||
attorney general, the Federal Trade Commission, and the appropriate | ||
law enforcement agency. | ||
F. If a dealer or investment adviser submits reports of | ||
suspected financial exploitation of a vulnerable adult to the | ||
Securities Commissioner and the department under Subsection C of | ||
this section, the dealer or investment adviser may at the time the | ||
dealer or investment adviser submits the reports also notify a | ||
third party reasonably associated with the vulnerable adult of the | ||
suspected financial exploitation, unless the dealer or investment | ||
adviser suspects the third party of financial exploitation of the | ||
vulnerable adult. | ||
G. Notwithstanding any other law, if a dealer or investment | ||
adviser submits reports of suspected financial exploitation of a | ||
vulnerable adult to the Securities Commissioner and the department | ||
under Subsection C of this section, the dealer or investment | ||
adviser: | ||
(1) may place a hold on any transaction that: | ||
(A) involves an account of the vulnerable adult; | ||
and | ||
(B) the dealer or investment adviser has cause to | ||
believe is related to the suspected financial exploitation; and | ||
(2) must place a hold on any transaction involving an | ||
account of the vulnerable adult if the hold is requested by the | ||
Securities Commissioner, the department, or a law enforcement | ||
agency. | ||
H. Subject to Subsection I of this section, a hold placed on | ||
any transaction under Subsection G of this section expires on the | ||
10th business day after the date the dealer or investment adviser | ||
submits the reports under Subsection C of this section. | ||
I. A dealer or investment adviser may extend a hold placed | ||
on any transaction under Subsection G of this section for a period | ||
not to exceed 30 business days after the expiration of the period | ||
prescribed by Subsection H of this section if requested by a state | ||
or federal agency or a law enforcement agency investigating the | ||
suspected financial exploitation. The dealer or investment adviser | ||
may also petition a court to extend a hold placed on any transaction | ||
under Subsection G of this section beyond the period prescribed by | ||
Subsection H of this section. A court may enter an order extending | ||
or shortening a hold or providing other relief. | ||
J. Each dealer and investment adviser shall adopt internal | ||
policies, programs, plans, or procedures for placing a hold on a | ||
transaction involving an account of a vulnerable adult under | ||
Subsection G of this section. | ||
K. A securities professional or person serving in a legal | ||
capacity for a dealer or investment adviser who makes a | ||
notification under Subsection B of this section, a dealer or | ||
investment adviser that submits a report under Subsection C of this | ||
section or makes a notification to a third party under Subsection F | ||
of this section, or a securities professional or person serving in a | ||
legal capacity who or dealer or investment adviser that testifies | ||
or otherwise participates in a judicial proceeding arising from a | ||
notification or report is immune from any civil or criminal | ||
liability arising from the notification, report, testimony, or | ||
participation in the judicial proceeding, unless the securities | ||
professional, person serving in a legal capacity for the dealer or | ||
investment adviser, or dealer or investment adviser acted in bad | ||
faith or with a malicious purpose. | ||
L. A dealer or investment adviser that in good faith and | ||
with the exercise of reasonable care places or does not place a hold | ||
on any transaction under Subsection G(1) of this section is immune | ||
from civil or criminal liability or disciplinary action resulting | ||
from the action or failure to act. | ||
M. To the extent permitted by state or federal law, a dealer | ||
or investment adviser, on request, shall provide access to or | ||
copies of records relevant to the suspected financial exploitation | ||
of a vulnerable adult to the Securities Commissioner, the | ||
department, a law enforcement agency, or a prosecuting attorney's | ||
office, either as part of a report to the Securities Commissioner, | ||
department, law enforcement agency, or prosecuting attorney's | ||
office or at the request of the Securities Commissioner, | ||
department, law enforcement agency, or prosecuting attorney's | ||
office in accordance with an investigation. | ||
N. The Board by rule shall prescribe the form and content of | ||
the report required to be submitted by a dealer or investment | ||
adviser to the Securities Commissioner under Subsection C of this | ||
section. | ||
SECTION 3. This Act takes effect September 1, 2017. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 3921 was passed by the House on May 4, | ||
2017, by the following vote: Yeas 128, Nays 10, 2 present, not | ||
voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 3921 was passed by the Senate on May | ||
22, 2017, by the following vote: Yeas 28, Nays 2. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: _____________________ | ||
Date | ||
_____________________ | ||
Governor |