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AB-2159 Financial abuse.(2017-2018)

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Date Published: 05/15/2018 09:00 PM
AB2159:v96#DOCUMENT

Amended  IN  Assembly  May 15, 2018
Amended  IN  Assembly  April 25, 2018
Amended  IN  Assembly  March 21, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 2159

Introduced by Assembly Member Chu

February 12, 2018

An act to amend Section 15630.1 of add Section 15630.2 to the Welfare and Institutions Code, relating to elder and dependent adult financial abuse.


LEGISLATIVE COUNSEL'S DIGEST


AB 2159, as amended, Chu. Elder and dependent adult financial Financial abuse.
Existing law establishes the Money Transmission Act for the purpose of protecting the interests of persons in this state who use money transmission services.
This bill would require a money transmitter to provide a consumer fraud warning on all money transmittal forms used by consumers to send money to an individual, to provide consumer fraud prevention training for its agents’ to monitor its agents, activities relating to consumer transmittals, and to establish a toll-free number for consumers to call to report fraud or suspected fraud. The bill would make a failure to implement the fraud prevention measures established by the bill subject to a civil penalty not to exceed $1,000, or if the violation is willful, a civil penalty not to exceed $5,000.

Existing law, the Elder Abuse and Dependent Adult Civil Protection Act, establishes procedures for the reporting, investigation, and prosecution of elder and dependent adult abuse. Existing law requires persons designated as mandated reporters of suspected financial abuse of an elder or dependent adult, as defined, to report known or suspected instances of elder or dependent adult financial abuse and makes failure to comply with these requirements subject to a civil penalty not exceeding $1,000 or if the failure to report is willful, a civil penalty not exceeding $5,000. Existing law defines “mandated reporters” for purposes of these requirements as all officers and employees of financial institutions.

This bill would also include within the definition of mandated reporters for these purposes, a money transmitter. The bill would define money transmitter as a person or entity that sells or issues payment instruments, or that receives money for transmission, as specified, but would exclude from the definition a business entity in which money transmission is not a primary function. The bill would make a violation of the reporting requirements described above by a money transmitter subject to a penalty only if the violation is willful, with a civil penalty not exceeding $5,000 and full reimbursement to the victim for the financial loss suffered as a result of the financial abuse, to be paid by the employer of the money transmitter.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 15630.2 is added to the Welfare and Institutions Code, to read:

15630.2.
 (a) A money transmitter shall do all of the following:
(1) Provide a clear, concise, and conspicuous consumer fraud warning on all money transmittal forms used by consumers to send money to an individual.
(2) Provide consumer fraud prevention training for its agents who process money transmittals.
(3) Monitor its agents’ activities relating to consumer transmittals.
(4) Establish a toll-free number for consumers to call to report fraud or suspected fraud.
(b) A money transmitter that originates money transfers in this state shall allow an individual to voluntarily disqualify himself or herself from sending or receiving money transfers. The disqualification shall last for one year, unless the individual requests that the disqualification be in effect for a period longer than one year. The individual may terminate the disqualification at any time upon written notice to the money transmitter.
(c) Failure to implement the fraud prevention measures by a money transmitter under this section shall be subject to a civil penalty not exceeding one thousand dollars ($1,000), or if the failure to implement is willful, a civil penalty not exceeding five thousand dollars ($5,000), which shall be paid by the money transmitter to the party bringing the action.
(d) Subdivision (h) of Section 15630 does not apply to a violation of this section.
(e) The civil penalty provided for in subdivision (c) shall be recovered only in a civil action brought against the money transmitter by the Attorney General, district attorney, or county counsel. An action shall not be brought under this section by any person other than the Attorney General, district attorney, or county counsel. Multiple actions for a civil penalty shall not be brought for the same violation.
(f) The Financial Elder Abuse Reporting Act of 2005, enacted by Senate Bill 1018 of the 2005–06 Regular Session, shall not be construed to limit, expand, or otherwise modify any civil liability or remedy that may exist under this or any other law.

SECTION 1.Section 15630.1 of the Welfare and Institutions Code is amended to read:
15630.1.

(a)For purposes of this section, the following definitions apply:

(1)“Financial abuse” means financial abuse as defined in Section 15610.30.

(2)“Financial institution” means any of the following:

(A)A depository institution, as defined in Section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1813(c)).

(B)An institution-affiliated party, as defined in Section 3(u) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1813(u)).

(C)A federal credit union or state credit union, as defined in Section 101 of the Federal Credit Union Act (12 U.S.C. Sec. 1752), including, but not limited to, an institution-affiliated party of a credit union, as defined in Section 206(r) of the Federal Credit Union Act (12 U.S.C. Sec. 1786(r)).

(3)“Mandated reporter of suspected financial abuse of an elder or dependent adult” means either of the following:

(A)An officer or employee of a financial institution.

(B)A money transmitter.

(4)(A)“Money transmitter” means a person or entity engaged in either of the following:

(i)Selling or issuing payment instruments, as defined in subdivision (s) of Section 2003 of the Financial Code.

(ii)Receiving money for transmission, as defined in subdivision (u) of Section 2003 of the Financial Code.

(B)“Money transmitter” does not include a business entity in which money transmission is not a primary function.

(b)(1)A mandated reporter of suspected financial abuse of an elder or dependent adult who has direct contact with the elder or dependent adult or who reviews or approves the elder or dependent adult’s financial documents, records, or transactions, in connection with providing financial services with respect to an elder or dependent adult, and who, within the scope of his or her employment or professional practice, has observed or has knowledge of an incident, that is directly related to the transaction or matter that is within that scope of employment or professional practice, that reasonably appears to be financial abuse, or who reasonably suspects that abuse, based solely on the information before him or her at the time of reviewing or approving the document, record, or transaction in the case of mandated reporters who do not have direct contact with the elder or dependent adult, shall report the known or suspected instance of financial abuse by telephone or through a confidential Internet reporting tool, as authorized pursuant to Section 15658, immediately, or as soon as practicably possible. If reported by telephone, a written report shall be sent, or an Internet report shall be made through the confidential Internet reporting tool established in Section 15658, within two working days to the local adult protective services agency or the local law enforcement agency.

(2)When two or more mandated reporters jointly have knowledge or reasonably suspect that financial abuse of an elder or a dependent adult for which the report is mandated has occurred, and when there is an agreement among them, the telephone report or Internet report, as authorized by Section 15658, may be made by a member of the reporting team who is selected by mutual agreement. A single report may be made and signed by the selected member of the reporting team. A member of the team who has knowledge that the member designated to report has failed to do so shall thereafter make that report.

(3)If the mandated reporter knows that the elder or dependent adult resides in a long-term care facility, as defined in Section 15610.47, the report shall be made to the local ombudsman or local law enforcement agency.

(c)An allegation by the elder or dependent adult, or any other person, that financial abuse has occurred is not sufficient to trigger the reporting requirement under this section if both of the following conditions are met:

(1)The mandated reporter of suspected financial abuse of an elder or dependent adult is aware of no other corroborating or independent evidence of the alleged financial abuse of an elder or dependent adult. The mandated reporter of suspected financial abuse of an elder or dependent adult is not required to investigate any accusations.

(2)In the exercise of his or her professional judgment, the mandated reporter of suspected financial abuse of an elder or dependent adult reasonably believes that financial abuse of an elder or dependent adult did not occur.

(d)(1)Failure to report financial abuse by an officer or employee of a financial institution under this section shall be subject to a civil penalty not exceeding one thousand dollars ($1,000) or if the failure to report is willful, a civil penalty not exceeding five thousand dollars ($5,000), which shall be paid by the financial institution that is the employer of the mandated reporter to the party bringing the action.

(2)Willful failure to report financial abuse by a money transmitter under this section shall be subject to a civil penalty not exceeding five thousand dollars ($5,000) and full reimbursement to the victim for the financial loss suffered as a result of the financial abuse. The civil penalty and full reimbursement shall be paid by the employer of the money transmitter to the party bringing the action.

(3)Subdivision (h) of Section 15630 does not apply to a violation of this section.

(e)(1)The civil penalty provided for in subdivision (d) shall be recovered only in a civil action brought against the financial institution or the employer of the money transmitter, by the Attorney General, district attorney, or county counsel. An action shall not be brought under this section by any person other than the Attorney General, district attorney, or county counsel. Multiple actions for the civil penalty shall not be brought for the same violation.

(2)The Financial Elder Abuse Reporting Act of 2005 shall not be construed to limit, expand, or otherwise modify any civil liability or remedy that may exist under this or any other law.

(f)As used in this section, “suspected financial abuse of an elder or dependent adult” occurs when a person who is required to report under paragraph (1) of subdivision (b) observes or has knowledge of behavior or unusual circumstances or transactions, or a pattern of behavior or unusual circumstances or transactions, that would lead an individual with like training or experience, based on the same facts, to form a reasonable belief that an elder or dependent adult is the victim of financial abuse.

(g)Reports of suspected financial abuse of an elder or dependent adult made by an employee or officer of a financial institution or by a money transmitter pursuant to this section are covered under subdivision (b) of Section 47 of the Civil Code.

(h)(1)A mandated reporter of suspected financial abuse of an elder or dependent adult is authorized to not honor a power of attorney described in Division 4.5 (commencing with Section 4000) of the Probate Code as to an attorney-in-fact, if the mandated reporter of suspected financial abuse of an elder or dependent adult makes a report to an adult protective services agency or a local law enforcement agency of any state that the principal may be subject to financial abuse, as described in this chapter or as defined in similar laws of another state, by that attorney-in-fact or person acting for or with that attorney-in-fact.

(2)If a mandated reporter of suspected financial abuse of an elder or dependent adult does not honor a power of attorney as to an attorney-in-fact pursuant to paragraph (1), the power of attorney shall remain enforceable as to every other attorney-in-fact also designated in the power of attorney about whom a report has not been made.

(3)For purposes of this subdivision, the terms “principal” and “attorney-in-fact” have the same meanings as those terms are used in Division 4.5 (commencing with Section 4000) of the Probate Code.

(i)This section does not apply to a business entity in which money transmission is not a primary function, unless that business entity is a financial institution as defined in paragraph (2) of subdivision (a).