85R24755 EES-F     By: Parker, Price, Button, H.B. No. 3921       Anderson of McLennan, Thierry     A BILL TO BE ENTITLED   AN ACT   relating to the financial exploitation of certain vulnerable   adults.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle Z, Title 3, Finance Code, is amended by   adding Chapter 280 to read as follows:   CHAPTER 280. PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL   EXPLOITATION          Sec. 280.001.  DEFINITIONS. In this chapter:                (1)  "Department" means the Department of Family and   Protective Services.                 (2)  "Exploitation" means the act of forcing,   compelling, or exerting undue influence over a person causing the   person to act in a way that is inconsistent with the person's   relevant past behavior or causing the person to perform services   for the benefit of another person.                (3)  "Financial exploitation" means:                      (A)  the wrongful or unauthorized taking,   withholding, appropriation, or use of the money, assets, or other   property or the identifying information of a person; or                      (B)  an act or omission by a person, including   through the use of a power of attorney on behalf of, or as the   conservator or guardian of, another person, to:                            (i)  obtain control, through deception,   intimidation, fraud, or undue influence, over the other person's   money, assets, or other property to deprive the other person of the   ownership, use, benefit, or possession of the property; or                            (ii)  convert the money, assets, or other   property of the other person to deprive the other person of the   ownership, use, benefit, or possession of the property.                 (4)  "Financial institution" has the meaning assigned   by Section 277.001.                (5)  "Vulnerable adult" means:                       (A)  an elderly person as that term is defined by   Section 48.002, Human Resources Code;                      (B)  a person with a disability as that term is   defined by Section 48.002, Human Resources Code; or                      (C)  an individual receiving services as that term   is defined by rule by the executive commissioner of the Health and   Human Services Commission as authorized by Section 48.251(b), Human   Resources Code.          Sec. 280.002.  REPORTING SUSPECTED FINANCIAL EXPLOITATION   OF VULNERABLE ADULTS. (a) If an employee of a financial   institution has cause to believe that financial exploitation of a   vulnerable adult who is an account holder with the financial   institution has occurred, is occurring, or has been attempted, the   employee shall notify the financial institution of the suspected   financial exploitation.          (b)  If a financial institution is notified of suspected   financial exploitation under Subsection (a) or otherwise has cause   to believe that financial exploitation of a vulnerable adult who is   an account holder with the financial institution has occurred, is   occurring, or has been attempted, the financial institution shall   assess the suspected financial exploitation and submit a report to   the department in the same manner as and containing the same   information required to be included in a report under Section   48.051, Human Resources Code. The financial institution shall   submit the report required by this subsection not later than the   earlier of:                (1)  the date the financial institution completes the   financial institution's assessment of the suspected financial   exploitation; or                (2)  the fifth business day after the date the   financial institution is notified of the suspected financial   exploitation under Subsection (a) or otherwise has cause to believe   that the suspected financial exploitation has occurred, is   occurring, or has been attempted.          (c)  A financial institution that submits a report to the   department of suspected financial exploitation of a vulnerable   adult under Subsection (b) is not required to make an additional   report of suspected abuse, neglect, or exploitation under Section   48.051, Human Resources Code, for the same conduct constituting the   reported suspected financial exploitation.          (d)  Each financial institution shall adopt internal   policies, programs, plans, or procedures for:                (1)  the employees of the financial institution to make   the notification required under Subsection (a); and                (2)  the financial institution to conduct the   assessment and submit the report required under Subsection (b).          (e)  The policies, programs, plans, or procedures adopted   under Subsection (d) may authorize the financial institution to   report the suspected financial exploitation to other appropriate   agencies and entities in addition to the department, including the   attorney general, the Federal Trade Commission, and the appropriate   law enforcement agency.          Sec. 280.003.  NOTIFYING THIRD PARTIES OF SUSPECTED   FINANCIAL EXPLOITATION OF VULNERABLE ADULTS. If a financial   institution submits a report of suspected financial exploitation of   a vulnerable adult to the department under Section 280.002(b), the   financial institution may at the time the financial institution   submits the report also notify a third party reasonably associated   with the vulnerable adult of the suspected financial exploitation,   unless the financial institution suspects the third party of   financial exploitation of the vulnerable adult.           Sec. 280.004.  TEMPORARY HOLD ON TRANSACTIONS IN CERTAIN   CASES OF SUSPECTED FINANCIAL EXPLOITATION OF VULNERABLE ADULTS.   (a) Notwithstanding any other law, if a financial institution   submits a report of suspected financial exploitation of a   vulnerable adult to the department under Section 280.002(b), the   financial institution:                (1)  may place a hold on any transaction that:                      (A)  involves an account of the vulnerable adult;   and                      (B)  the financial institution has cause to   believe is related to the suspected financial exploitation; and                (2)  must place a hold on any transaction involving an   account of the vulnerable adult if the hold is requested by the   department or a law enforcement agency.          (b)  Subject to Subsection (c), a hold placed on any   transaction under Subsection (a) expires on the 10th business day   after the date the financial institution submits the report under   Section 280.002(b).          (c)  The financial institution may extend a hold placed on   any transaction under Subsection (a) for a period not to exceed 30   business days after the expiration of the period prescribed by   Subsection (b) if requested by a state or federal agency or a law   enforcement agency investigating the suspected financial   exploitation. The financial institution may also petition a court   to extend a hold placed on any transaction under Subsection (a)   beyond the period prescribed by Subsection (b). A court may enter   an order extending or shortening a hold or providing other relief.          (d)  Each financial institution shall adopt internal   policies, programs, plans, or procedures for placing a hold on a   transaction involving an account of a vulnerable adult under this   section.          Sec. 280.005.  IMMUNITY. (a) An employee of a financial   institution who makes a notification under Section 280.002(a), a   financial institution that submits a report under Section   280.002(b) or makes a notification to a third party under Section   280.003, or an employee who or financial institution that testifies   or otherwise participates in a judicial proceeding arising from a   notification or report is immune from any civil or criminal   liability arising from the notification, report, testimony, or   participation in the judicial proceeding, unless the employee or   financial institution acted in bad faith or with a malicious   purpose.           (b)  A financial institution that in good faith and with the   exercise of reasonable care places or does not place a hold on any   transaction under Section 280.004(a)(1) is immune from any civil or   criminal liability or disciplinary action resulting from that   action or failure to act.          Sec. 280.006.  RECORDS. To the extent permitted by state or   federal law, a financial institution shall provide, on request,   access to or copies of records relevant to the suspected financial   exploitation of a vulnerable adult to the department, a law   enforcement agency, or a prosecuting attorney's office, either as   part of a report to the department, law enforcement agency, or   prosecuting attorney's office or at the request of the department,   law enforcement agency, or prosecuting attorney's office in   accordance with an investigation.           SECTION 2.  The Securities Act (Article 581-1 et seq.,   Vernon's Texas Civil Statutes) is amended by adding Section 45 to   read as follows:          Sec. 45.  PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL   EXPLOITATION. A. In this section:                (1)  "Department" means the Department of Family and   Protective Services.                 (2)  "Exploitation," "financial exploitation," and   "vulnerable adult" have the meanings assigned by Section 280.001,   Finance Code.                 (3)  "Securities professional" means an agent, an   investment adviser representative, or a person who serves in a   supervisory or compliance capacity for a dealer or investment   adviser.           B.  If a securities professional or a person serving in a   legal capacity for a dealer or investment adviser has cause to   believe that financial exploitation of a vulnerable adult who is an   account holder with the dealer or investment adviser has occurred,   is occurring, or has been attempted, the securities professional or   person serving in a legal capacity for the dealer or investment   adviser shall notify the dealer or investment adviser of the   suspected financial exploitation.          C.  If a dealer or investment adviser is notified of   suspected financial exploitation under Subsection B of this section   or otherwise has cause to believe that financial exploitation of a   vulnerable adult who is an account holder with the dealer or   investment adviser has occurred, is occurring, or has been   attempted, the dealer or investment adviser shall assess the   suspected financial exploitation and submit a report to the   Securities Commissioner, in accordance with rules adopted under   Subsection N of this section, and the department in the same manner   as and containing the same information required to be included in a   report under Section 48.051, Human Resources Code. The dealer or   investment adviser shall submit the reports required by this   subsection not later than the earlier of:                (1)  the date the dealer or investment adviser   completes the dealer's or investment adviser's assessment of the   suspected financial exploitation; or                (2)  the fifth business day after the date the dealer or   investment adviser is notified of the suspected financial   exploitation under Subsection B of this section or otherwise has   cause to believe that the suspected financial exploitation has   occurred, is occurring, or has been attempted.          D.  A dealer or investment adviser who submits a report to   the department of suspected financial exploitation of a vulnerable   adult under Subsection C of this section is not required to make an   additional report of suspected abuse, neglect, or exploitation   under Section 48.051, Human Resources Code, for the same conduct   constituting the reported suspected financial exploitation.          E.  Each dealer and investment adviser shall adopt internal   policies, programs, plans, or procedures for the securities   professionals or persons serving in a legal capacity for the dealer   or investment adviser to make the notification required under   Subsection B of this section and for the dealer or investment   adviser to conduct the assessment and submit the reports required   under Subsection C of this section. The policies, programs, plans,   or procedures adopted under this subsection may authorize the   dealer or investment adviser to report the suspected financial   exploitation to other appropriate agencies and entities in addition   to the Securities Commissioner and the department, including the   attorney general, the Federal Trade Commission, and the appropriate   law enforcement agency.           F.  If a dealer or investment adviser submits reports of   suspected financial exploitation of a vulnerable adult to the   Securities Commissioner and the department under Subsection C of   this section, the dealer or investment adviser may at the time the   dealer or investment adviser submits the reports also notify a   third party reasonably associated with the vulnerable adult of the   suspected financial exploitation, unless the dealer or investment   adviser suspects the third party of financial exploitation of the   vulnerable adult.           G.  Notwithstanding any other law, if a dealer or investment   adviser submits reports of suspected financial exploitation of a   vulnerable adult to the Securities Commissioner and the department   under Subsection C of this section, the dealer or investment   adviser:                (1)  may place a hold on any transaction that:                      (A)  involves an account of the vulnerable adult;   and                      (B)  the dealer or investment adviser has cause to   believe is related to the suspected financial exploitation; and                (2)  must place a hold on any transaction involving an   account of the vulnerable adult if the hold is requested by the   Securities Commissioner, the department, or a law enforcement   agency.          H.  Subject to Subsection I of this section, a hold placed on   any transaction under Subsection G of this section expires on the   10th business day after the date the dealer or investment adviser   submits the reports under Subsection C of this section.          I.  A dealer or investment adviser may extend a hold placed   on any transaction under Subsection G of this section for a period   not to exceed 30 business days after the expiration of the period   prescribed by Subsection H of this section if requested by a state   or federal agency or a law enforcement agency investigating the   suspected financial exploitation. The dealer or investment adviser   may also petition a court to extend a hold placed on any transaction   under Subsection G of this section beyond the period prescribed by   Subsection H of this section. A court may enter an order extending   or shortening a hold or providing other relief.          J.  Each dealer and investment adviser shall adopt internal   policies, programs, plans, or procedures for placing a hold on a   transaction involving an account of a vulnerable adult under   Subsection G of this section.          K.  A securities professional or person serving in a legal   capacity for a dealer or investment adviser who makes a   notification under Subsection B of this section, a dealer or   investment adviser that submits a report under Subsection C of this   section or makes a notification to a third party under Subsection F   of this section, or a securities professional or person serving in a   legal capacity who or dealer or investment adviser that testifies   or otherwise participates in a judicial proceeding arising from a   notification or report is immune from any civil or criminal   liability arising from the notification, report, testimony, or   participation in the judicial proceeding, unless the securities   professional, person serving in a legal capacity for the dealer or   investment adviser, or dealer or investment adviser acted in bad   faith or with a malicious purpose.           L.  A dealer or investment adviser that in good faith and   with the exercise of reasonable care places or does not place a hold   on any transaction under Subsection G(1) of this section is immune   from civil or criminal liability or disciplinary action resulting   from the action or failure to act.          M.  To the extent permitted by state or federal law, a dealer   or investment adviser, on request, shall provide access to or   copies of records relevant to the suspected financial exploitation   of a vulnerable adult to the Securities Commissioner, the   department, a law enforcement agency, or a prosecuting attorney's   office, either as part of a report to the Securities Commissioner,   department, law enforcement agency, or prosecuting attorney's   office or at the request of the Securities Commissioner,   department, law enforcement agency, or prosecuting attorney's   office in accordance with an investigation.          N.  The Board by rule shall prescribe the form and content of   the report required to be submitted by a dealer or investment   adviser to the Securities Commissioner under Subsection C of this   section.          SECTION 3.  This Act takes effect September 1, 2017.