85R12891 EES-F
By: Parker H.B. No. 3921
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) "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.