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  85R12891 EES-F
 
  By: Parker 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)  "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.