85R6383 EES-F

By: Thierry H.B. No. 916

A BILL TO BE ENTITLED

AN ACT

relating to requiring financial institutions to report the suspected financial abuse of elderly persons; providing a civil and criminal penalty.

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. REPORTING OF FINANCIAL ABUSE OF ELDERLY PERSONS

Sec. 280.001. DEFINITIONS. (a) In this chapter:

(1) "Adult protective services division" means the adult protective services division of the Department of Family and Protective Services.

(2) "Elderly person" has the meaning assigned by Section 48.002, Human Resources Code.

(3) "Finance commission" means the Finance Commission of Texas.

(4) "Financial abuse" means the wrongful or negligent taking, appropriation, obtaining, retention, or use of or assisting in the wrongful or negligent taking, appropriation, obtaining, retention, or use of the property of an elderly person by any means, including by exerting undue influence. The term includes financial exploitation.

(5) "Financial exploitation" means the wrongful or negligent taking, appropriation, obtaining, retention, or use of the money or other property of an elderly person by a person who has a relationship of confidence or trust with the elderly person. Financial exploitation may involve coercion, manipulation, threats, intimidation, misrepresentation, or the exerting of undue influence. The term includes:

(A) the breach of a fiduciary relationship, including the misuse of a durable power of attorney or the abuse of guardianship powers, that results in the unauthorized appropriation, sale, or transfer of the elderly person's property;

(B) the unauthorized taking of personal assets;

(C) the misappropriation, misuse, or unauthorized transfer of the elderly person's money from a personal or a joint account; and

(D) the negligent or intentional failure to effectively use the elderly person's income and assets for the necessities required for the elderly person's support and maintenance.

(6) "Financial institution" has the meaning assigned by Section 277.001.

(7) "Financial regulatory officials" means the banking commissioner of Texas, the savings and mortgage lending commissioner, and the credit union commissioner.

(b) For purposes of Subsection (a)(5), a person has a relationship of confidence or trust with an elderly person if the person:

(1) is a parent, spouse, adult child, or other relative by blood or marriage of the elderly person;

(2) is a joint tenant or tenant-in-common with the elderly person;

(3) has a legal or fiduciary relationship with the elderly person;

(4) is a financial planner or investment professional who provides services to the elderly person; or

(5) is a paid or unpaid caregiver of the elderly person.

Sec. 280.002. REPORTING FINANCIAL ABUSE OF ELDERLY PERSONS. (a) Notwithstanding any other law, if an officer or employee of a financial institution has a good faith belief that financial abuse of an elderly person has occurred or is occurring, the financial institution shall:

(1) subject to Subchapter B-1, Chapter 48, Human Resources Code, submit a report notifying the adult protective services division of the suspected financial abuse; and

(2) notify the appropriate local law enforcement agency with jurisdiction over the municipality or county in which the elderly person resides of the suspected financial abuse for purposes of investigating and determining whether an offense under Section 32.53, Penal Code, or other law has occurred.

(b) The report and notification required by Subsection (a) must be made:

(1) by telephone or electronic means, not later than 24 hours after the financial institution becomes aware of the suspected financial abuse; and

(2) in writing, not later than the third business day after the date the financial institution becomes aware of the suspected financial abuse.

(c) For purposes of Subsection (a), an officer's or employee's good faith belief must be acquired in connection with the provision of financial services by the financial institution to or on behalf of the elderly person and must be based on:

(1) the officer's or employee's observation or knowledge of an incident of suspected financial abuse, if the officer or employee has direct contact with the elderly person; or

(2) the presence of information indicating potential financial abuse during a review or approval process performed by the officer or employee in connection with the provision of financial services, if the officer or employee does not have direct contact with the elderly person but reviews or approves the elderly person's financial documents, records, or transactions.

(d) Nothing in this section shall be construed to require a financial institution to investigate an allegation of financial abuse made by an elderly person or other person.

Sec. 280.003. CONFIDENTIALITY OF INFORMATION. (a) Except as provided by Subsection (b), the following information is confidential and is not subject to disclosure to the public, except under court order:

(1) the information contained in a report submitted or notification made under this chapter;

(2) the name of the financial institution making the report or notification or the identity of the officers or employees described by Section 280.002(a); and

(3) information provided by or submitted to a financial institution in connection with an investigation arising out of a report submitted or notification made under Section 280.002.

(b) Information that is confidential under Subsection (a) may be disclosed only:

(1) to the adult protective services division or another state agency, a law enforcement agency, or the attorney general, in connection with the reporting of or an investigation of suspected financial abuse of the elderly person to whom the information pertains;

(2) to, or as authorized by, the elderly person or the guardian of the elderly person, unless the financial institution suspects the guardian of financial abuse of the elderly person; or

(3) as part of a civil or criminal action related to the reported financial abuse.

(c) A person commits an offense if the person discloses information in violation of this section. An offense under this section is a Class C misdemeanor.

Sec. 280.004. IMMUNITY FROM LIABILITY. A financial institution that is acting in good faith and that submits a report or makes a notification under this chapter is immune from any criminal or civil liability arising from:

(1) the report or notification; or

(2) participation in any judicial proceeding arising from the report or notification.

Sec. 280.005. CIVIL PENALTY. (a) A financial institution that fails to submit a report or make a notification in violation of this chapter is liable to this state for a civil penalty in an amount not to exceed $1,000, unless a court finds the violation to be wilful, in which case the amount of the civil penalty may not exceed $5,000.

(b) The attorney general may bring an action on behalf of this state to recover a civil penalty under Subsection (a).

Sec. 280.006. RULEMAKING. Subject to Section 48.072, Human Resources Code, the finance commission, the Credit Union Commission, and the executive commissioner of the Health and Human Services Commission, after consulting with the financial regulatory officials and the Department of Family and Protective Services, shall jointly adopt rules necessary to implement this chapter, including rules that require each financial institution to implement a training program to:

(1) assist its officers and employees in recognizing signs of potential financial abuse of an elderly person; and

(2) inform its officers and employees about the reporting and notification requirements of this chapter.

SECTION 2. 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 abuse of an elderly person 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 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, 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 ABUSE OF ELDERLY PERSONS

Sec. 48.071. DEFINITIONS. In this subchapter, "financial abuse," "financial institution," and "financial regulatory officials" have the meanings assigned by Section 280.001, Finance Code.

Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL ABUSE. (a) The executive commissioner, after consultation with the financial regulatory officials, by rule shall prescribe the form and content of a report submitted by a financial institution under Section 280.002, Finance Code. A report submitted by a financial institution under Section 280.002, Finance Code, constitutes a report of suspected financial abuse of an elderly person for purposes of this subchapter.

(b) In adopting rules under this section, the executive commissioner shall ensure that a report of suspected financial abuse of an elderly person described by Subsection (a) includes to the extent possible the same information required under Section 48.051(d).

(c) A financial institution that submits a report to the department of suspected financial abuse of an elderly person under Section 280.002, Finance Code, in accordance with this section satisfies the requirement of making a report of suspected abuse, neglect, or exploitation, as applicable, under Section 48.051, if applicable.

Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF REPORTS. The executive commissioner shall adopt rules regarding the assessment, investigation, and disposition of a report of suspected financial abuse of an elderly person received under Section 280.002, Finance Code. The executive commissioner shall model rules adopted under this section after the assessment, investigation, and disposition procedures used for reports of abuse, neglect, or exploitation received by the department under this chapter, other than a report received under Subchapter F, and shall include rules requiring:

(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 timeframe and manner provided by Section 48.151;

(B) perform an interview with the elderly person 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 Section 48.1522; and

(E) review certain cases involving multiple reports under Section 48.051 and this subchapter similar to 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 abuse of an elderly person 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 abuse of an elderly person, the probate court, as defined by Section 22.007, Estates Code, may authorize entry of the place of residence of an elderly person.

(b) A peace officer shall accompany and assist the person making a court-ordered entry under this section, if in the opinion of the court such 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 abuse of an elderly person; or

(2) the provision of protective services to an elderly person.

(b) The department or another protective services agency may petition the appropriate court to enjoin any interference with:

(1) an investigation of suspected financial abuse of an elderly person under this subchapter; or

(2) the provision of protective services such as removal of an elderly person to safer surroundings or safeguarding the person's resources from financial abuse.

Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission, the banking commissioner of Texas, the savings and mortgage lending commissioner, the credit union commissioner, and the department shall enter into a memorandum of understanding regarding the reporting and investigation of suspected financial abuse of an elderly person 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 entity to properly execute its respective duties and responsibilities to provide services to elderly persons 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. APPLICABILITY. (a) This subchapter does not apply to a report of financial abuse of an elderly person made under Subchapter B-1.

(b) The confidentiality of information received or provided by the department in connection with a report of financial abuse of an elderly person made under Subchapter B-1 is governed by Section 48.078 and by Section 280.003, Finance Code.

SECTION 6. Subchapter D, Chapter 48, Human Resources Code, is amended by adding Section 48.1511 to read as follows:

Sec. 48.1511. APPLICABILITY. 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. This Act takes effect September 1, 2017.