HB 3294 — Enacting the Bank Protections for Eligible Adults from Financial Exploitation Act

"Investment adviser" has the same meaning as defined in §32-4-401 of this code.

§31A-2C-4.

Government disclosures.

(a) Any depository institution and/or its employees who believe that financial exploitation of an eligible adult has occurred, may have been attempted, or is being attempted, shall promptly notify a designated state agency;

and(b) Any broker-dealer or investment adviser, and/or their employees, acting in accordance with actions traditionally associated with those committed by depository institutions, and not in contradiction with any of the duties and protections described in §32-6-601 et seq.

of this code shall also promptly notify a designated state agency.

§31A-2C-5.

Authority to delay, refuse, or prevent certain activities.

(a) When, based on information they have individually observed or information they have received from a government agency or a law-enforcement agency, a depository institution, or a broker-dealer or  investment adviser acting in accordance with actions traditionally associated with those committed by depository institutions, and not in contradiction with any of the duties and protections described in §32-6-601 et seq.

of this code and/or their employees, believe that financial exploitation of an eligible adult may have occurred, has been attempted, is occurring, or is being attempted, the depository institution, broker-dealer, investment adviser, and/or their employees may, but are not required to:

(1) Delay or refuse one or more transactions with or involving the eligible adult;

(2) Delay or refuse to permit the withdrawal or disbursement of funds contained in the eligible adult's account;

(3) Prevent a change in ownership of the eligible adult's account;(4) Prevent a transfer of funds from the eligible adult's account to an account owned wholly  or partially by another person;

(5) Refuse to comply with instructions given to the depository institution, broker-dealer, or investment adviser by an agent or a person acting for or with an agent under a power of attorney signed or purported to have been signed by the eligible adult;

or (6) Prevent the designation or change the designation of beneficiaries to receive any property, benefit, or contract rights for an eligible adult at death.

(b) A depository institution, broker-dealer, investment adviser, and/or their employees are not required to act under subsection (a) of this section when provided with information alleging that financial exploitation may have occurred, may have been attempted, is occurring, or is being  attempted, but may use their sole discretion to determine whether or not to act under subsection  (a) of this section based on the information available to them at the time.

(c) The authority to delay a transaction set forth in subsection (a) of this section expires upon the sooner of:

(1) Fifteen business days after the date on which the depository institution, broker-dealer,  and/or investment adviser first acted under subsection (a) of this section;

 (2) When the depository institution, broker-dealer, and/or investment adviser is satisfied in  its sole discretion that the transaction or act will not likely result in financial exploitation of the eligible adult;

or (3) Upon an order of a court of competent jurisdiction directing the release of funds.

(d) Notwithstanding any other law to the contrary, the refusal to engage in a transaction  as authorized under subsection (a) of this section may not constitute the wrongful dishonor of an  item under §46-4-1 et seq.

of this code.(e) A reasonable belief that payment of a check will facilitate the financial exploitation of an  eligible adult constitutes reasonable grounds to doubt the collectability of the item for purposes of the federal Check Clearing for the 21st Century Act, 12 U.S.C.

§ 5001 et seq., the federal Expedited Funds Availability Act, 12 U.S.C.

§ 4001 et seq., and 12 C.F.R.

part 229.

Nothing herein, however, requires depository institutions, broker-dealers, investment advisers, and/or their employees, to review the checks of eligible adults.

(f) A delay or refusal to complete a funds transfer request as authorized under subsection  (a) of this section does not violate §46-4A-101 et seq.

of this code:

Provided, That if a transaction is delayed under subsection (a) of this section, the payment order is not considered  as received until the hold is removed and the depository institution and/or broker-dealer submits the payment order for processing.

Funds transfer and payment order have the same meanings as defined in §46-4A-101 et seq.

of this code.

§31A-2C-6.

Third-party notifications.

(a) A depository institution, broker-dealer, investment adviser, and/or their employees may notify an associated third party, if any, if the depository institution, broker-dealer, investment adviser, or their employees believe that the financial exploitation of the eligible adult is occurring, has or may have occurred, is being attempted, or has been or may have been attempted.(b) A depository institution, broker-dealer, investment adviser, and/or their employees, may choose not to notify an associated third party as described in subsection (a) of this section, if the depository institution, broker-dealer, investment adviser, or employees believe that the third party is, may be, or may have been engaged in the financial exploitation of the eligible adult.

 (c) When providing information under subsection (a) of this section, a depository institution, broker-dealer, investment adviser, and/or their employees may limit the information provided to disclosing their suspicion that the eligible adult may be a victim or target of financial exploitation.(d) Any disclosure under subsection (a) of this section is exempt from coverage by state privacy laws and/or requirements.

§31A-2C-7.

No private cause of action.

 Compliance with this article shall not serve as the basis for a private cause of action against any depository institution, broker-dealer, investment advisor, or their employees unless there is clear and convincing evidence that these persons did not act in good faith.

  AdoptedRejected