| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
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. |