Texas 2017 - 85th Regular

Texas Senate Bill SB2067 Compare Versions

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11 85R12891 EES-F
22 By: Hancock S.B. No. 2067
33
44
55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to the financial exploitation of certain vulnerable
88 adults.
99 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1010 SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
1111 adding Chapter 280 to read as follows:
1212 CHAPTER 280. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL
1313 EXPLOITATION
1414 Sec. 280.001. DEFINITIONS. In this chapter:
1515 (1) "Adult protective services division" means the
1616 adult protective services division of the Department of Family and
1717 Protective Services.
1818 (2) "Exploitation" means the act of forcing,
1919 compelling, or exerting undue influence over a person causing the
2020 person to act in a way that is inconsistent with the person's
2121 relevant past behavior or causing the person to perform services
2222 for the benefit of another person.
2323 (3) "Financial exploitation" means:
2424 (A) the wrongful or unauthorized taking,
2525 withholding, appropriation, or use of the money, assets, or other
2626 property or the identifying information of a person; or
2727 (B) an act or omission by a person, including
2828 through the use of a power of attorney on behalf of, or as the
2929 conservator or guardian of, another person, to:
3030 (i) obtain control, through deception,
3131 intimidation, fraud, or undue influence, over the other person's
3232 money, assets, or other property to deprive the other person of the
3333 ownership, use, benefit, or possession of the property; or
3434 (ii) convert the money, assets, or other
3535 property of the other person to deprive the other person of the
3636 ownership, use, benefit, or possession of the property.
3737 (4) "Financial institution" has the meaning assigned
3838 by Section 277.001.
3939 (5) "Vulnerable adult" means:
4040 (A) an elderly person as that term is defined by
4141 Section 48.002, Human Resources Code;
4242 (B) a person with a disability as that term is
4343 defined by Section 48.002, Human Resources Code; or
4444 (C) an individual receiving services as that term
4545 is defined by rule by the executive commissioner of the Health and
4646 Human Services Commission as authorized by Section 48.251(b), Human
4747 Resources Code.
4848 Sec. 280.002. REPORTING SUSPECTED FINANCIAL EXPLOITATION
4949 OF VULNERABLE ADULTS. (a) If an employee of a financial
5050 institution has cause to believe that financial exploitation of a
5151 vulnerable adult who is an account holder with the financial
5252 institution has occurred, is occurring, or has been attempted, the
5353 employee shall notify the financial institution of the suspected
5454 financial exploitation.
5555 (b) If a financial institution is notified of suspected
5656 financial exploitation under Subsection (a) or otherwise has cause
5757 to believe that financial exploitation of a vulnerable adult who is
5858 an account holder with the financial institution has occurred, is
5959 occurring, or has been attempted, the financial institution shall
6060 investigate the suspected financial exploitation and submit a
6161 report to the adult protective services division in accordance with
6262 Subchapter B-1, Chapter 48, Human Resources Code. The financial
6363 institution shall submit the report required by this subsection not
6464 later than the earlier of:
6565 (1) the date the financial institution completes the
6666 investigation; or
6767 (2) the fifth business day after the date the
6868 financial institution is notified of the suspected financial
6969 exploitation under Subsection (a) or otherwise has cause to believe
7070 that the suspected financial exploitation has occurred, is
7171 occurring, or has been attempted.
7272 (c) Each financial institution shall adopt internal
7373 policies, programs, plans, or procedures for:
7474 (1) the employees of the financial institution to make
7575 the notification required under Subsection (a); and
7676 (2) the financial institution to conduct the
7777 investigation and submit the report required under Subsection (b).
7878 (d) The policies, programs, plans, or procedures adopted
7979 under Subsection (c) may authorize the financial institution to
8080 report the suspected financial exploitation to other appropriate
8181 agencies and entities in addition to the adult protective services
8282 division, including the attorney general, the Federal Trade
8383 Commission, and the appropriate law enforcement agency.
8484 Sec. 280.003. NOTIFYING THIRD PARTIES OF SUSPECTED
8585 FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. If a financial
8686 institution submits a report of suspected financial exploitation of
8787 a vulnerable adult to the adult protective services division under
8888 Section 280.002(b), the financial institution may at the time the
8989 financial institution submits the report also notify a third party
9090 reasonably associated with the vulnerable adult of the suspected
9191 financial exploitation, unless the financial institution suspects
9292 the third party of financial exploitation of the vulnerable adult.
9393 Sec. 280.004. TEMPORARY HOLD ON TRANSACTIONS IN CERTAIN
9494 CASES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS.
9595 (a) Notwithstanding any other law, if a financial institution
9696 submits a report of suspected financial exploitation of a
9797 vulnerable adult to the adult protective services division under
9898 Section 280.002(b), the financial institution:
9999 (1) may place a hold on a transaction involving an
100100 account of the vulnerable adult; and
101101 (2) must place a hold on a transaction involving an
102102 account of the vulnerable adult if the hold is requested by the
103103 adult protective services division or a law enforcement agency.
104104 (b) Subject to Subsection (c), a hold placed on a
105105 transaction under Subsection (a) expires on the 10th business day
106106 after the date the financial institution submits the report under
107107 Section 280.002(b).
108108 (c) The financial institution may extend a hold placed on a
109109 transaction under Subsection (a) for a period not to exceed 30
110110 business days after the expiration of the period prescribed by
111111 Subsection (b) if requested by a state or federal agency or a law
112112 enforcement agency investigating the suspected financial
113113 exploitation. The financial institution may also petition a court
114114 to extend a hold placed on a transaction under Subsection (a) beyond
115115 the period prescribed by Subsection (b). A court may enter an
116116 order extending or shortening a hold or providing other relief.
117117 Sec. 280.005. IMMUNITY. (a) An employee of a financial
118118 institution who makes a notification under Section 280.002(a), a
119119 financial institution that submits a report under Section
120120 280.002(b) or makes a notification under Section 280.003, or an
121121 employee who or financial institution that testifies or otherwise
122122 participates in a judicial proceeding arising from a notification
123123 or report is immune from any civil or criminal liability arising
124124 from the notification, report, testimony, or participation in the
125125 judicial proceeding, unless the employee or financial institution
126126 acted in bad faith or with a malicious purpose.
127127 (b) A financial institution that in good faith and with the
128128 exercise of reasonable care places or does not place a hold on a
129129 transaction under Section 280.004(a)(1) is immune from any civil or
130130 criminal liability or disciplinary action resulting from that
131131 action or failure to act.
132132 Sec. 280.006. RECORDS. To the extent permitted by state or
133133 federal law, a financial institution shall provide, on request,
134134 access to or copies of records relevant to the suspected financial
135135 exploitation of a vulnerable adult to the adult protective services
136136 division, a law enforcement agency, or a prosecuting attorney's
137137 office, either as part of a report to the adult protective services
138138 division, law enforcement agency, or prosecuting attorney's office
139139 or at the request of the adult protective services division, law
140140 enforcement agency, or prosecuting attorney's office in accordance
141141 with an investigation.
142142 SECTION 2. The Securities Act (Article 581-1 et seq.,
143143 Vernon's Texas Civil Statutes) is amended by adding Section 45 to
144144 read as follows:
145145 Sec. 45. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL
146146 EXPLOITATION. A. In this section:
147147 (1) "Adult protective services division" means the
148148 adult protective services division of the Department of Family and
149149 Protective Services.
150150 (2) "Exploitation," "financial exploitation," and
151151 "vulnerable adult" have the meanings assigned by Section 280.001,
152152 Finance Code.
153153 (3) "Securities professional" means an agent, an
154154 investment adviser representative, or a person who serves in a
155155 supervisory or compliance capacity for a dealer or investment
156156 adviser.
157157 B. If a securities professional or a person serving in a
158158 legal capacity for a dealer or investment adviser has cause to
159159 believe that financial exploitation of a vulnerable adult who is an
160160 account holder with the dealer or investment adviser has occurred,
161161 is occurring, or has been attempted, the securities professional or
162162 person serving in a legal capacity for the dealer or investment
163163 adviser shall notify the dealer or investment adviser of the
164164 suspected financial exploitation.
165165 C. If a dealer or investment adviser is notified of
166166 suspected financial exploitation under Subsection B of this section
167167 or otherwise has cause to believe that financial exploitation of a
168168 vulnerable adult who is an account holder with the dealer or
169169 investment adviser has occurred, is occurring, or has been
170170 attempted, the dealer or investment adviser shall investigate the
171171 suspected financial exploitation and submit a report to the
172172 Securities Commissioner, in accordance with rules adopted under
173173 Subsection L of this section, and the adult protective services
174174 division in accordance with Subchapter B-1, Chapter 48, Human
175175 Resources Code. The dealer or investment adviser shall submit the
176176 reports required by this subsection not later than the earlier of:
177177 (1) the date the dealer or investment adviser
178178 completes the investigation; or
179179 (2) the fifth business day after the date the dealer or
180180 investment adviser is notified of the suspected financial
181181 exploitation under Subsection B of this section or otherwise has
182182 cause to believe that the suspected financial exploitation has
183183 occurred, is occurring, or has been attempted.
184184 D. Each dealer and investment adviser shall adopt internal
185185 policies, programs, plans, or procedures for the securities
186186 professionals or persons serving in a legal capacity for the dealer
187187 or investment adviser to make the notification required under
188188 Subsection B of this section and for the dealer or investment
189189 adviser to conduct the investigations and submit the reports
190190 required under Subsection C of this section. The policies,
191191 programs, plans, or procedures adopted under this subsection may
192192 authorize the dealer or investment adviser to report the suspected
193193 financial exploitation to other appropriate agencies and entities
194194 in addition to the Securities Commissioner and the adult protective
195195 services division, including the attorney general, the Federal
196196 Trade Commission, and the appropriate law enforcement agency.
197197 E. If a dealer or investment adviser submits reports of
198198 suspected financial exploitation of a vulnerable adult to the
199199 Securities Commissioner and the adult protective services division
200200 under Subsection C of this section, the dealer or investment
201201 adviser may at the time the dealer or investment adviser submits the
202202 reports also notify a third party reasonably associated with the
203203 vulnerable adult of the suspected financial exploitation, unless
204204 the dealer or investment adviser suspects the third party of
205205 financial exploitation of the vulnerable adult.
206206 F. Notwithstanding any other law, if a dealer or investment
207207 adviser submits reports of suspected financial exploitation of a
208208 vulnerable adult to the Securities Commissioner and the adult
209209 protective services division under Subsection C of this section,
210210 the dealer or investment adviser:
211211 (1) may place a hold on a transaction involving an
212212 account of the vulnerable adult; and
213213 (2) must place a hold on a transaction involving an
214214 account of the vulnerable adult if the hold is requested by the
215215 Securities Commissioner, the adult protective services division,
216216 or a law enforcement agency.
217217 G. Subject to Subsection H of this section, a hold placed on
218218 a transaction under Subsection F of this section expires on the 10th
219219 business day after the date the dealer or investment adviser
220220 submits the reports under Subsection C of this section.
221221 H. A dealer or investment adviser may extend a hold placed
222222 on a transaction under Subsection F of this section for a period not
223223 to exceed 30 business days after the expiration of the period
224224 prescribed by Subsection G of this section if requested by a state
225225 or federal agency or a law enforcement agency investigating the
226226 suspected financial exploitation. The dealer or investment adviser
227227 may also petition a court to extend a hold placed on a transaction
228228 under Subsection F of this section beyond the period prescribed by
229229 Subsection G of this section. A court may enter an order extending
230230 or shortening a hold or providing other relief.
231231 I. A securities professional or person serving in a legal
232232 capacity for a dealer or investment adviser who makes a
233233 notification under Subsection B of this section, a dealer or
234234 investment adviser that submits a report under Subsection C of this
235235 section or makes a notification under Subsection E of this section,
236236 or a securities professional or person serving in a legal capacity
237237 who or dealer or investment adviser that testifies or otherwise
238238 participates in a judicial proceeding arising from a notification
239239 or report is immune from any civil or criminal liability arising
240240 from the notification, report, testimony, or participation in the
241241 judicial proceeding, unless the securities professional, person
242242 serving in a legal capacity for the dealer or investment adviser, or
243243 dealer or investment adviser acted in bad faith or with a malicious
244244 purpose.
245245 J. A dealer or investment adviser that in good faith and
246246 with the exercise of reasonable care places or does not place a hold
247247 on a transaction under Subsection F(1) of this section is immune
248248 from civil or criminal liability or disciplinary action resulting
249249 from the action or failure to act.
250250 K. To the extent permitted by state or federal law, a dealer
251251 or investment adviser, on request, shall provide access to or
252252 copies of records relevant to the suspected financial exploitation
253253 of a vulnerable adult to the Securities Commissioner, the adult
254254 protective services division, a law enforcement agency, or a
255255 prosecuting attorney's office, either as part of a report to the
256256 Securities Commissioner, adult protective services division, law
257257 enforcement agency, or prosecuting attorney's office or at the
258258 request of the Securities Commissioner, adult protective services
259259 division, law enforcement agency, or prosecuting attorney's office
260260 in accordance with an investigation.
261261 L. The Board by rule shall prescribe the form and content of
262262 the report required to be submitted by a dealer or investment
263263 adviser to the Securities Commissioner under Subsection C of this
264264 section.
265265 SECTION 3. Subchapter A, Chapter 48, Human Resources Code,
266266 is amended by adding Section 48.008 to read as follows:
267267 Sec. 48.008. CONSOLIDATION OF CERTAIN REPORTS. If
268268 cost-effective and feasible and to the extent permitted by law, the
269269 executive commissioner by rule may consolidate the form and
270270 procedures used to submit a report under Sections 48.051 and
271271 48.072.
272272 SECTION 4. Chapter 48, Human Resources Code, is amended by
273273 adding Subchapter B-1 to read as follows:
274274 SUBCHAPTER B-1. FINANCIAL EXPLOITATION OF VULNERABLE ADULTS
275275 Sec. 48.071. DEFINITIONS. In this subchapter:
276276 (1) "Dealer" and "investment adviser" have the
277277 meanings assigned by Section 4, The Securities Act (Article 581-4,
278278 Vernon's Texas Civil Statutes).
279279 (2) "Financial exploitation," "financial
280280 institution," and "vulnerable adult" have the meanings assigned by
281281 Section 280.001, Finance Code.
282282 (3) "Securities professional" has the meaning
283283 assigned by Section 45, The Securities Act (Article 581-45,
284284 Vernon's Texas Civil Statutes).
285285 Sec. 48.072. CERTAIN REPORTS OF SUSPECTED FINANCIAL
286286 EXPLOITATION. (a) The executive commissioner, after consultation
287287 with the banking commissioner of Texas, the savings and mortgage
288288 lending commissioner, the credit union commissioner, and the
289289 securities commissioner, by rule shall prescribe the form and
290290 content of the report required to be submitted by a financial
291291 institution under Section 280.002(b), Finance Code, and the report
292292 required to be submitted by a dealer or investment adviser under
293293 Subsection C, Section 45, The Securities Act (Article 581-45,
294294 Vernon's Texas Civil Statutes). A report submitted by a financial
295295 institution under Section 280.002(b), Finance Code, or a report
296296 submitted by a dealer or investment adviser under Subsection C,
297297 Section 45, The Securities Act (Article 581-45, Vernon's Texas
298298 Civil Statutes), constitutes a report of suspected financial
299299 exploitation of a vulnerable adult for purposes of this subchapter.
300300 (b) In adopting rules under this section, the executive
301301 commissioner shall ensure that a report of suspected financial
302302 exploitation of a vulnerable adult described by Subsection (a)
303303 includes to the extent possible the same information required to be
304304 included in a report under Section 48.051(d).
305305 (c) A financial institution that submits a report to the
306306 department of suspected financial exploitation of a vulnerable
307307 adult under Section 280.002(b), Finance Code, or a dealer or
308308 investment adviser that submits a report to the department of
309309 suspected financial exploitation of a vulnerable adult under
310310 Subsection C, Section 45, The Securities Act (Article 581-45,
311311 Vernon's Texas Civil Statutes), in accordance with this section is
312312 not required to make an additional report of suspected abuse,
313313 neglect, or exploitation under Section 48.051 for the same conduct
314314 constituting the financial exploitation reported under this
315315 section.
316316 Sec. 48.073. ASSESSMENT, INVESTIGATION, AND DISPOSITION OF
317317 REPORTS. (a) The executive commissioner by rule shall adopt
318318 procedures for the assessment, investigation, and disposition of a
319319 report of suspected financial exploitation of a vulnerable adult
320320 received under Section 280.002(b), Finance Code, or Subsection C,
321321 Section 45, The Securities Act (Article 581-45, Vernon's Texas
322322 Civil Statutes), that must be similar to the procedures used for the
323323 assessment, investigation, and disposition of a report of abuse,
324324 neglect, or exploitation received by the department under this
325325 chapter, other than a report received under Subchapter F.
326326 (b) The procedures adopted under this section must require:
327327 (1) a risk assessment similar to the assessment
328328 required under Section 48.004;
329329 (2) investigations similar to the investigations
330330 required under Subchapter D, including requirements that the
331331 department:
332332 (A) take action on a report within the time frame
333333 and in the manner provided by Section 48.151;
334334 (B) perform an interview with the vulnerable
335335 adult similar to the interview required by Section 48.152;
336336 (C) if appropriate, implement a system to
337337 investigate complex cases similar to the system implemented under
338338 Section 48.1521;
339339 (D) report criminal conduct to appropriate law
340340 enforcement agencies similar to the reports under Section 48.1522;
341341 and
342342 (E) review certain cases involving multiple
343343 reports under Section 48.051 and this subchapter similar to the
344344 review performed under Section 48.1523; and
345345 (3) a determination of services similar to the
346346 determination required by Section 48.202.
347347 Sec. 48.074. AUTHORITY OF DEPARTMENT OR OTHER AGENCY. The
348348 department or another appropriate state agency has the authority to
349349 act on or with respect to an allegation of financial exploitation of
350350 a vulnerable adult under this subchapter to the same extent the
351351 department or other agency has the authority to act on or with
352352 respect to an allegation of abuse, neglect, or exploitation under
353353 Subchapter B.
354354 Sec. 48.075. ACCESS TO INVESTIGATION. (a) To implement an
355355 investigation of reported financial exploitation of a vulnerable
356356 adult, the probate court, as defined by Section 22.007, Estates
357357 Code, may authorize entry into the place of residence of a
358358 vulnerable adult.
359359 (b) A peace officer shall accompany and assist the person
360360 making a court-ordered entry under this section if the court
361361 determines that action is necessary.
362362 Sec. 48.076. INTERFERENCE WITH INVESTIGATION OR SERVICES
363363 PROHIBITED. (a) Notwithstanding Section 1151.001, Estates Code, a
364364 person, including a guardian, may not interfere with:
365365 (1) an investigation by the department or by another
366366 protective services agency of suspected financial exploitation of a
367367 vulnerable adult; or
368368 (2) the provision of protective services to a
369369 vulnerable adult.
370370 (b) The department or another protective services agency
371371 may petition the appropriate court to enjoin any interference with:
372372 (1) an investigation of suspected financial
373373 exploitation of a vulnerable adult under this subchapter; or
374374 (2) the provision of protective services, such as
375375 removing a vulnerable adult to safer surroundings or safeguarding
376376 the vulnerable adult's resources from financial exploitation.
377377 Sec. 48.077. MEMORANDUM OF UNDERSTANDING. The commission,
378378 the banking commissioner of Texas, the savings and mortgage lending
379379 commissioner, the credit union commissioner, the securities
380380 commissioner, and the department shall enter into a memorandum of
381381 understanding regarding the reporting and investigation of
382382 suspected financial exploitation of a vulnerable adult under this
383383 subchapter.
384384 Sec. 48.078. CONFIDENTIALITY. (a) All files, reports,
385385 records, communications, and working papers used or developed by
386386 the department or other state agency in an investigation made under
387387 this subchapter or in providing services as a result of an
388388 investigation are confidential and not subject to disclosure under
389389 Chapter 552, Government Code.
390390 (b) The department or investigating state agency may
391391 establish procedures to exchange with another state agency or
392392 governmental entity information that is necessary for the
393393 department, state agency, or governmental entity to properly
394394 execute its respective duties and responsibilities to provide
395395 services to vulnerable adults under this chapter or other law. An
396396 exchange of information under this subsection does not affect
397397 whether the information is subject to disclosure under Chapter 552,
398398 Government Code.
399399 SECTION 5. Subchapter C, Chapter 48, Human Resources Code,
400400 is amended by adding Section 48.104 to read as follows:
401401 Sec. 48.104. NONAPPLICABILITY. (a) This subchapter does
402402 not apply to a report of financial exploitation of a vulnerable
403403 adult made under Subchapter B-1.
404404 (b) The confidentiality of information received or provided
405405 by the department in connection with a report of financial
406406 exploitation of a vulnerable adult made under Subchapter B-1 is
407407 governed by Section 48.078.
408408 SECTION 6. Subchapter D, Chapter 48, Human Resources Code,
409409 is amended by adding Section 48.1511 to read as follows:
410410 Sec. 48.1511. NONAPPLICABILITY. This subchapter does not
411411 apply to an investigation conducted under Subchapter B-1 unless the
412412 executive commissioner by rule requires the application of a
413413 provision of this subchapter.
414414 SECTION 7. Section 59.006(a), Finance Code, is amended to
415415 read as follows:
416416 (a) This section provides the exclusive method for
417417 compelled discovery of a record of a financial institution relating
418418 to one or more customers but does not create a right of privacy in a
419419 record. This section does not apply to and does not require or
420420 authorize a financial institution to give a customer notice of:
421421 (1) a demand or inquiry from a state or federal
422422 government agency authorized by law to conduct an examination of
423423 the financial institution;
424424 (2) a record request from a state or federal
425425 government agency or instrumentality under statutory or
426426 administrative authority that provides for, or is accompanied by, a
427427 specific mechanism for discovery and protection of a customer
428428 record of a financial institution, including a record request from
429429 a federal agency subject to the Right to Financial Privacy Act of
430430 1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
431431 Internal Revenue Service under Section 1205, Internal Revenue Code
432432 of 1986;
433433 (3) a record request from or report to a government
434434 agency arising out of:
435435 (A) the investigation or prosecution of a
436436 criminal offense;
437437 (B) the investigation of alleged abuse, neglect,
438438 or exploitation of an elderly or disabled person or of alleged
439439 financial exploitation of a vulnerable adult in accordance with
440440 Chapter 48, Human Resources Code; or
441441 (C) the assessment for or provision of
442442 guardianship services under Subchapter E, Chapter 161, Human
443443 Resources Code;
444444 (4) a record request in connection with a garnishment
445445 proceeding in which the financial institution is garnishee and the
446446 customer is debtor;
447447 (5) a record request by a duly appointed receiver for
448448 the customer;
449449 (6) an investigative demand or inquiry from a state
450450 legislative investigating committee;
451451 (7) an investigative demand or inquiry from the
452452 attorney general of this state as authorized by law other than the
453453 procedural law governing discovery in civil cases;
454454 (8) the voluntary use or disclosure of a record by a
455455 financial institution subject to other applicable state or federal
456456 law; or
457457 (9) a record request in connection with an
458458 investigation conducted under Section 1054.151, 1054.152, or
459459 1102.001, Estates Code.
460460 SECTION 8. This Act takes effect September 1, 2017.