Bill Text: TX SB2067 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to the financial exploitation of certain vulnerable adults.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-04-25 - Left pending in committee [SB2067 Detail]
Download: Texas-2017-SB2067-Introduced.html
85R12891 EES-F | ||
By: Hancock | S.B. No. 2067 |
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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) "Adult protective services division" means the | ||
adult protective services division of 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 | ||
investigate the suspected financial exploitation and submit a | ||
report to the adult protective services division in accordance with | ||
Subchapter B-1, Chapter 48, 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 | ||
investigation; 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) 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 | ||
investigation and submit the report required under Subsection (b). | ||
(d) The policies, programs, plans, or procedures adopted | ||
under Subsection (c) may authorize the financial institution to | ||
report the suspected financial exploitation to other appropriate | ||
agencies and entities in addition to the adult protective services | ||
division, 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 adult protective services division 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 adult protective services division under | ||
Section 280.002(b), the financial institution: | ||
(1) may place a hold on a transaction involving an | ||
account of the vulnerable adult; and | ||
(2) must place a hold on a transaction involving an | ||
account of the vulnerable adult if the hold is requested by the | ||
adult protective services division or a law enforcement agency. | ||
(b) Subject to Subsection (c), a hold placed on a | ||
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 a | ||
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 a 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. | ||
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 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 a | ||
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 adult protective services | ||
division, a law enforcement agency, or a prosecuting attorney's | ||
office, either as part of a report to the adult protective services | ||
division, law enforcement agency, or prosecuting attorney's office | ||
or at the request of the adult protective services division, 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) "Adult protective services division" means the | ||
adult protective services division of 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 investigate the | ||
suspected financial exploitation and submit a report to the | ||
Securities Commissioner, in accordance with rules adopted under | ||
Subsection L of this section, and the adult protective services | ||
division in accordance with Subchapter B-1, Chapter 48, 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 investigation; 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. 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 investigations 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 adult protective | ||
services division, including the attorney general, the Federal | ||
Trade Commission, and the appropriate law enforcement agency. | ||
E. If a dealer or investment adviser submits reports of | ||
suspected financial exploitation of a vulnerable adult to the | ||
Securities Commissioner and the adult protective services division | ||
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. | ||
F. 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 adult | ||
protective services division under Subsection C of this section, | ||
the dealer or investment adviser: | ||
(1) may place a hold on a transaction involving an | ||
account of the vulnerable adult; and | ||
(2) must place a hold on a transaction involving an | ||
account of the vulnerable adult if the hold is requested by the | ||
Securities Commissioner, the adult protective services division, | ||
or a law enforcement agency. | ||
G. Subject to Subsection H of this section, a hold placed on | ||
a transaction under Subsection F 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. | ||
H. A dealer or investment adviser may extend a hold placed | ||
on a transaction under Subsection F of this section for a period not | ||
to exceed 30 business days after the expiration of the period | ||
prescribed by Subsection G 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 a transaction | ||
under Subsection F of this section beyond the period prescribed by | ||
Subsection G of this section. A court may enter an order extending | ||
or shortening a hold or providing other relief. | ||
I. 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 under Subsection E 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. | ||
J. A dealer or investment adviser that in good faith and | ||
with the exercise of reasonable care places or does not place a hold | ||
on a transaction under Subsection F(1) of this section is immune | ||
from civil or criminal liability or disciplinary action resulting | ||
from the action or failure to act. | ||
K. 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 adult | ||
protective services division, a law enforcement agency, or a | ||
prosecuting attorney's office, either as part of a report to the | ||
Securities Commissioner, adult protective services division, law | ||
enforcement agency, or prosecuting attorney's office or at the | ||
request of the Securities Commissioner, adult protective services | ||
division, law enforcement agency, or prosecuting attorney's office | ||
in accordance with an investigation. | ||
L. 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. Subchapter A, Chapter 48, Human Resources Code, | ||
is amended by adding Section 48.008 to read as follows: | ||
Sec. 48.008. CONSOLIDATION OF CERTAIN REPORTS. If | ||
cost-effective and feasible and to the extent permitted by law, the | ||
executive commissioner by rule may consolidate the form and | ||
procedures used to submit a report under Sections 48.051 and | ||
48.072. | ||
SECTION 4. Chapter 48, Human Resources Code, is amended by | ||
adding Subchapter B-1 to read as follows: | ||
SUBCHAPTER B-1. FINANCIAL EXPLOITATION OF VULNERABLE ADULTS | ||
Sec. 48.071. DEFINITIONS. In this subchapter: | ||
(1) "Dealer" and "investment adviser" have the | ||
meanings assigned by Section 4, The Securities Act (Article 581-4, | ||
Vernon's Texas Civil Statutes). | ||
(2) "Financial exploitation," "financial | ||
institution," and "vulnerable adult" have the meanings assigned by | ||
Section 280.001, Finance Code. | ||
(3) "Securities professional" has the meaning | ||
assigned by Section 45, The Securities Act (Article 581-45, | ||
Vernon's Texas Civil Statutes). | ||
Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL | ||
EXPLOITATION. (a) The executive commissioner, after consultation | ||
with the banking commissioner of Texas, the savings and mortgage | ||
lending commissioner, the credit union commissioner, and the | ||
securities commissioner, by rule shall prescribe the form and | ||
content of the report required to be submitted by a financial | ||
institution under Section 280.002(b), Finance Code, and the report | ||
required to be submitted by a dealer or investment adviser under | ||
Subsection C, Section 45, The Securities Act (Article 581-45, | ||
Vernon's Texas Civil Statutes). A report submitted by a financial | ||
institution under Section 280.002(b), Finance Code, or a report | ||
submitted by a dealer or investment adviser under Subsection C, | ||
Section 45, The Securities Act (Article 581-45, Vernon's Texas | ||
Civil Statutes), constitutes a report of suspected financial | ||
exploitation of a vulnerable adult for purposes of this subchapter. | ||
(b) In adopting rules under this section, the executive | ||
commissioner shall ensure that a report of suspected financial | ||
exploitation of a vulnerable adult described by Subsection (a) | ||
includes to the extent possible the same information required to be | ||
included in a report under Section 48.051(d). | ||
(c) A financial institution that submits a report to the | ||
department of suspected financial exploitation of a vulnerable | ||
adult under Section 280.002(b), Finance Code, or a dealer or | ||
investment adviser that submits a report to the department of | ||
suspected financial exploitation of a vulnerable adult under | ||
Subsection C, Section 45, The Securities Act (Article 581-45, | ||
Vernon's Texas Civil Statutes), in accordance with this section is | ||
not required to make an additional report of suspected abuse, | ||
neglect, or exploitation under Section 48.051 for the same conduct | ||
constituting the financial exploitation reported under this | ||
section. | ||
Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF | ||
REPORTS. (a) The executive commissioner by rule shall adopt | ||
procedures for the assessment, investigation, and disposition of a | ||
report of suspected financial exploitation of a vulnerable adult | ||
received under Section 280.002(b), Finance Code, or Subsection C, | ||
Section 45, The Securities Act (Article 581-45, Vernon's Texas | ||
Civil Statutes), that must be similar to the procedures used for the | ||
assessment, investigation, and disposition of a report of abuse, | ||
neglect, or exploitation received by the department under this | ||
chapter, other than a report received under Subchapter F. | ||
(b) The procedures adopted under this section must require: | ||
(1) a risk assessment similar to the assessment | ||
required under Section 48.004; | ||
(2) investigations similar to the investigations | ||
required under Subchapter D, including requirements that the | ||
department: | ||
(A) take action on a report within the time frame | ||
and in the manner provided by Section 48.151; | ||
(B) perform an interview with the vulnerable | ||
adult similar to the interview required by Section 48.152; | ||
(C) if appropriate, implement a system to | ||
investigate complex cases similar to the system implemented under | ||
Section 48.1521; | ||
(D) report criminal conduct to appropriate law | ||
enforcement agencies similar to the reports under Section 48.1522; | ||
and | ||
(E) review certain cases involving multiple | ||
reports under Section 48.051 and this subchapter similar to the | ||
review performed under Section 48.1523; and | ||
(3) a determination of services similar to the | ||
determination required by Section 48.202. | ||
Sec. 48.074. AUTHORITY OF DEPARTMENT OR OTHER AGENCY. The | ||
department or another appropriate state agency has the authority to | ||
act on or with respect to an allegation of financial exploitation of | ||
a vulnerable adult under this subchapter to the same extent the | ||
department or other agency has the authority to act on or with | ||
respect to an allegation of abuse, neglect, or exploitation under | ||
Subchapter B. | ||
Sec. 48.075. ACCESS TO INVESTIGATION. (a) To implement an | ||
investigation of reported financial exploitation of a vulnerable | ||
adult, the probate court, as defined by Section 22.007, Estates | ||
Code, may authorize entry into the place of residence of a | ||
vulnerable adult. | ||
(b) A peace officer shall accompany and assist the person | ||
making a court-ordered entry under this section if the court | ||
determines that action is necessary. | ||
Sec. 48.076. INTERFERENCE WITH INVESTIGATION OR SERVICES | ||
PROHIBITED. (a) Notwithstanding Section 1151.001, Estates Code, a | ||
person, including a guardian, may not interfere with: | ||
(1) an investigation by the department or by another | ||
protective services agency of suspected financial exploitation of a | ||
vulnerable adult; or | ||
(2) the provision of protective services to a | ||
vulnerable adult. | ||
(b) The department or another protective services agency | ||
may petition the appropriate court to enjoin any interference with: | ||
(1) an investigation of suspected financial | ||
exploitation of a vulnerable adult under this subchapter; or | ||
(2) the provision of protective services, such as | ||
removing a vulnerable adult to safer surroundings or safeguarding | ||
the vulnerable adult's resources from financial exploitation. | ||
Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission, | ||
the banking commissioner of Texas, the savings and mortgage lending | ||
commissioner, the credit union commissioner, the securities | ||
commissioner, and the department shall enter into a memorandum of | ||
understanding regarding the reporting and investigation of | ||
suspected financial exploitation of a vulnerable adult under this | ||
subchapter. | ||
Sec. 48.078. CONFIDENTIALITY. (a) All files, reports, | ||
records, communications, and working papers used or developed by | ||
the department or other state agency in an investigation made under | ||
this subchapter or in providing services as a result of an | ||
investigation are confidential and not subject to disclosure under | ||
Chapter 552, Government Code. | ||
(b) The department or investigating state agency may | ||
establish procedures to exchange with another state agency or | ||
governmental entity information that is necessary for the | ||
department, state agency, or governmental entity to properly | ||
execute its respective duties and responsibilities to provide | ||
services to vulnerable adults under this chapter or other law. An | ||
exchange of information under this subsection does not affect | ||
whether the information is subject to disclosure under Chapter 552, | ||
Government Code. | ||
SECTION 5. Subchapter C, Chapter 48, Human Resources Code, | ||
is amended by adding Section 48.104 to read as follows: | ||
Sec. 48.104. NONAPPLICABILITY. (a) This subchapter does | ||
not apply to a report of financial exploitation of a vulnerable | ||
adult made under Subchapter B-1. | ||
(b) The confidentiality of information received or provided | ||
by the department in connection with a report of financial | ||
exploitation of a vulnerable adult made under Subchapter B-1 is | ||
governed by Section 48.078. | ||
SECTION 6. Subchapter D, Chapter 48, Human Resources Code, | ||
is amended by adding Section 48.1511 to read as follows: | ||
Sec. 48.1511. NONAPPLICABILITY. This subchapter does not | ||
apply to an investigation conducted under Subchapter B-1 unless the | ||
executive commissioner by rule requires the application of a | ||
provision of this subchapter. | ||
SECTION 7. Section 59.006(a), Finance Code, is amended to | ||
read as follows: | ||
(a) This section provides the exclusive method for | ||
compelled discovery of a record of a financial institution relating | ||
to one or more customers but does not create a right of privacy in a | ||
record. This section does not apply to and does not require or | ||
authorize a financial institution to give a customer notice of: | ||
(1) a demand or inquiry from a state or federal | ||
government agency authorized by law to conduct an examination of | ||
the financial institution; | ||
(2) a record request from a state or federal | ||
government agency or instrumentality under statutory or | ||
administrative authority that provides for, or is accompanied by, a | ||
specific mechanism for discovery and protection of a customer | ||
record of a financial institution, including a record request from | ||
a federal agency subject to the Right to Financial Privacy Act of | ||
1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the | ||
Internal Revenue Service under Section 1205, Internal Revenue Code | ||
of 1986; | ||
(3) a record request from or report to a government | ||
agency arising out of: | ||
(A) the investigation or prosecution of a | ||
criminal offense; | ||
(B) the investigation of alleged abuse, neglect, | ||
or exploitation of an elderly or disabled person or of alleged | ||
financial exploitation of a vulnerable adult in accordance with | ||
Chapter 48, Human Resources Code; or | ||
(C) the assessment for or provision of | ||
guardianship services under Subchapter E, Chapter 161, Human | ||
Resources Code; | ||
(4) a record request in connection with a garnishment | ||
proceeding in which the financial institution is garnishee and the | ||
customer is debtor; | ||
(5) a record request by a duly appointed receiver for | ||
the customer; | ||
(6) an investigative demand or inquiry from a state | ||
legislative investigating committee; | ||
(7) an investigative demand or inquiry from the | ||
attorney general of this state as authorized by law other than the | ||
procedural law governing discovery in civil cases; | ||
(8) the voluntary use or disclosure of a record by a | ||
financial institution subject to other applicable state or federal | ||
law; or | ||
(9) a record request in connection with an | ||
investigation conducted under Section 1054.151, 1054.152, or | ||
1102.001, Estates Code. | ||
SECTION 8. This Act takes effect September 1, 2017. |