85R24755 EES-F
 
  By: Parker, Price, Anderson of McLennan, H.B. No. 3921
      Thierry
 
  Substitute the following for H.B. No. 3921:
 
  By:  Longoria C.S.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)  "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.