85R12891 EES-F     By: Hancock S.B. No. 2067       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.