SB 189 — FINANCIAL EXPLOITATION ACT

c e s k 23 SECTION 3.

[NEW MATERIAL] DEFINITIONS.--As used in the e a n b 24 Financial Exploitation Act:

u [ A.

"caregiver" means a person who has been .218474.1 - 3 - entrusted with or who has assumed responsibility for the care of an eligible adult or the eligible adult's property and may include a family member that is related to the eligible adult by blood or marriage;

a court-appointed guardian or conservator;

an adult living in the same household as the eligible adult;

or an employee or .220115.1 STBTC/SB 189 volunteer of an adult daycare, assisted living or residential care facility, group home, nursing home, hospital, mental health treatment center or continuing care community or a service provider of such entity;

or clergy member, imam, minister, priest, rabbi or similar religious or e t 17 spiritual advisor;

w l n d 18 C.

"eligible adult" means a person eighteen years = = 19 a l of age or older with cognitive impairment or a mental, physical i a e r 20 or developmental condition or a person who is experiencing a t m m 21 other circumstances that cause the person to be susceptible to d r e 22 undue influence or substantially impaired in the ability to c e st k17 23 provide adequately for the person's personal or financial ew al n bd 2418 affairs or protection, regardless of whether the person has u= [= 19 been adjudicated pursuant to Section 45-5-303 NMSA 1978;

.218474.1a -l 4i -a e r 20 D.

"fiduciary relationship" means an agreement or a t m m 21 arrangement that creates fiduciary duties owed from one person d r e 22 to another and includes the relationship between a principal c e s k 23 and an attorney-in-fact pursuant to a power of attorney;

a e a n b 24 conservator and a protected person;

a trustee and a u [ beneficiary;

a financial advisor or broker and an account .220115.1 - 2 - STBTC/SB 189 owner;

"financial institution" means an organization e t 17 authorized to do business pursuant to state or federal laws w l n d 18 relating to financial entities and includes a bank, trust = = 19 a l company, savings bank, building and loan association, savings i a e r 20 and loan company or credit union;

a t m m 21 G.

"qualified individual" means a person designated d r e 22 by a financial institution to conduct a review of suspected c e s k 23 financial exploitation, report suspected financial exploitation e a n b 24 or delay transactions and receive training pursuant to the u [ provisions of the Financial Exploitation Act;

.218474.1 - 5 - H.

or withdrawal from a financial, investment or securities account or changes to ownership on such account, but excludes wills, trusts or transfer on death designations or instruments e t 17 of a similar type;

I.w l n d 18 G.

= = 19 (1) a caregiver, health care or mental health a l i a e r 20 care provider;

a t m m 21 (2) a person upon whom an eligible adult is d r e 22 dependent and with whom the eligible adult has a confidential c e s k 23 or fiduciary relationship;

or e a n b 24 (3) a person in a position of authority, u [ including an eligible adult's family member, financial advisor, e.220115.1 t- 173 - STBTC/SB 189 legal professional, clergy member, imam, minister, priest, w l n d 18 rabbi or similar religious or spiritual advisor;

and =H. = 19 a l J.

"undue influence" means excessive persuasion or i a e r 20 domination of the decision-making process of an eligible adult a t m m 21 by a trusted person that causes an eligible adult to consent to d r e 22 a transaction or refrain from consenting to a transaction that c e s k 23 would reasonably be expected to result in financial harm to the e a n b 24 eligible adult, including controlling the eligible adult's u [ interaction with others, access to information or necessaries .218474.1 - 6 - of life;

The fact that an eligible adult had independent legal counsel with respect to the transaction is evidence that the transaction was not the product of financial exploitation, but shall not be dispositive on whether the issue of financial e t 17 exploitation occurred.

w l n d 18 SECTION 4.3.

[NEW MATERIAL] REPORTINGCIVIL FINANCIALREMEDIES.-- EXPLOITATION.--= = 19 A.

WhenAn eligible adult or an attorney-in-fact, a qualifiedl individuali reasonablya believese thatr 20 conservator, guardian who has been granted financial exploitationpowers by a t m m 21 the court, temporary conservator or trustee acting for or on d r e 22 behalf of an eligible adult may havecommence occurred,a maycivil haveaction beenin attempteda orc ise beings attempted,k 23 court of competent jurisdiction against a qualifiedperson individual:suspected of e a n b 24 financially exploiting an eligible adult in order to:

(1)u shall[ promptly(1) notifyreturn theproperty; financial institutions division of the regulation and licensing e t 17 department and the adult protective services division of the w l n d 18 aging and long-term services department;

=.220115.1 =- 194 a- lSTBTC/SB 189 (2) shallstop attemptor toenjoin notify a thirdtransaction; party i a e r 20 previously designated by the eligible adult;

and a t m m 21 (3) mayreturn attemptany toprofit notifyreceived from a thirdtransaction; party that d r e 22 is not designated but is known by the qualified individual to c e s k 23 be reasonably associated with an eligible adult.

e(4) aseek ncompensatory bdamages 24for B.a transaction;

Aor qualified(5) individualvoid shallor notrescind disclose u [ information to a thirdtransaction. party who is suspected of financial .218474.1 - 7 - exploitation or other abuse of the eligible adult.

SECTION 5.

[NEW MATERIAL] IMMUNITY FOR REPORTING FINANCIAL EXPLOITATION.--A qualified individual who exercises reasonable care on behalf of a financial institution and complies with the provisions of Sections 4 and 8 of this 2021 act shall be immune from liability that might otherwise arise from such disclosure, as shall the financial institution.

SECTION 6.

[NEW MATERIAL] DELAY OF SUSPECT TRANSACTIONS.-- A.

A financial institution may delay a disbursement or transaction from an account of an eligible adult or an account for which the eligible adult is a beneficiary if:

(1) after initiating an internal review of the requested disbursement or transaction, a qualified individual reasonably believes that the requested disbursement or transaction may result in financial exploitation of the e t 17 eligible adult;

and w l n d 18 (2) the financial institution:

= = 19 a l (a) provides written notification of the i a e r 20 delay and the reason for the delay to all parties authorized to a t m m 21 transact business on the account no later than two business d r e 22 days after the requested disbursement or transaction, unless c e s k 23 any such party is reasonably believed to have attempted the e a n b 24 financial exploitation of the eligible adult;

u [ (b) notifies the financial institutions .218474.1 - 8 - division of the regulation and licensing department and the adult protective services division of the aging and long-term services department no later than two business days after the requested disbursement or transaction;

and (c) at the request of the financial institutions division of the regulation and licensing department, provides a status report of the internal review required pursuant to Paragraph (1) of Subsection A of this section.

AnyTo delayprevail ofon a disbursementclaim ormade transaction as authorized pursuant to this sectionsection, the plaintiff shall expireprove uponby a preponderance of the soonerevidence of:that financial exploitation occurred.

(1) a written determination by the financial institutions division of the regulation and licensing department that the disbursement or transaction will not result in financial exploitation of the eligible adult;

or e t 17 (2) fifteen business days from the date that w l n d 18 the financial institution first delayed the disbursement or = = 19 a l transaction unless either the financial institutions division i a e r 20 of the regulation and licensing department or the adult a t m m 21 protective services division of the aging and long-term d r e 22 services department makes a written request that the financial c e s k 23 institution extend the delay, in which case the delay shall e a n b 24 expire twenty-five days from the date that the financial u [ institution first delayed the disbursement or transaction, .218474.1 - 9 - unless otherwise terminated or extended by either of the divisions or by a court order.

APunitive courtdamages mayshall enterbe anawarded orderwhen extending the delay of the disbursement or transaction or may order other protective relief based on a petitionplaintiff ofproves thethat director of the financialdefendant institutionscommitted division of the regulation and licensing department, the director of the adult protective services division of the aging and long-term services department, the financial institutionexploitation thatand: instituted the delay pursuant to this section or any other interested party.

SECTION(1) 7.acted with knowledge that the transaction was wrongful;

[NEW(2) MATERIAL]made IMMUNITYa FORtransaction DELAYin INindifference SUSPECT TRANSACTIONS.--A financial institution or qualifiedreckless individualdisregard thatfor exercisesthe reasonablefinancial careinterests and is in compliance with Sections 6 and 8 of thisthe 2021eligible act,e shallt be17 immuneadult from administrative and civil liability that mightresulted otherwise arise from such delay in afinancial disbursementharm or transaction pursuant to ethe teligible 17adult; Section 6 of this 2021 act.

w l n d 18 SECTIONand 8.= = 19 (3) failed to cure the alleged financial a l i a e r 20 exploitation within fifteen days of receiving notice of intent a t m m 21 to seek relief from the plaintiff.

[NEWd MATERIAL]r TRAINING TO IDENTIFY FINANCIAL = = 19 a l EXPLOITATION.-- i a e r22 20D. A.

TheIf directora ofplaintiff theprevails financialagainst institutions a tdefendant mon ma 21 division of the regulation and licensing department shall d r e 22 promulgate rules pertaining to training guidelines and c e s k 23 standardizedfinancial trainingexploitation curriculumclaim, guidelinesthe thatplaintiff financialmay recover e a n b 24 institutionsreasonable mayattorney usefees toand trainany qualifiedcosts individualsincurred towhile review,pursuing u [ delaysuch andrelief. report transactions that are identified to have .218474.1 - 10 - potentially resulted from financial exploitation.

A.220115.1 financial- institution5 may- developSTBTC/SB its189 ownE. training as approved by the director of the division.

TheA trainingremedy requiredobtained pursuant to this section shall includenot alimit descriptionin ofany indicatorsway ofthe financialright, exploitationtitle ofand aninterest eligibleof adulta andgood thefaith processpurchaser, formortgagee, reportingholder suspectedof financiala exploitationsecurity internallyinterest andor toother thethird divisionparty andwho theobtains adultan protectiveinterest servicesin divisionproperty oftransferred thefrom agingan andeligible long-termadult. services department.

B.F.

ARelief financialobtained institutionpursuant shall provide training regarding the financial exploitation of eligible adults to qualifiedthis individualssection designatedshall bynot aaffect financialthe institutionvalue pursuant to Section 3 of thea Financialmortgage. Exploitation Act.

SECTIONG. 9.

[NEWNothing MATERIAL]in DISCLOSUREthis OFsection INFORMATION.--A financial institution shall providelimit accessany toother recordscause or copies of recordsaction thatunder pertain to the suspectedlaws or attempted financial exploitation of anthis eligiblestate. adult to the financial institutions e t 17 division of the regulation and licensing department and the w l n d 18 adult protective services division of the aging and long-term = = 19 a l services department as part of a referral to the divisions and i a e r 20 to law enforcement in the course of an investigation.

RelevantH. a t m m 21 records may include historical records or records relating to d r e 22 recent transactions that may serve as evidence of financial c e s k 23 exploitation of an eligible adult.

AWhen recorda madeplaintiff availabledies eduring the course of a ncivil bproceeding 24initiated pursuant to this sectionsection, shallthe notpersonal berepresentative consideredof athe "publicplaintiff's uestate [may record"continue aswith definedthe inproceeding; Subsection G of Section 14-2-6 NMSA 1978.

.218474.1provided -that 11no -proceeding Nothingmade inpursuant to this section shall be construedinitiated toafter otherwise impede the authorityplaintiff's ofdeath. the director of the securities division of the regulation and licensing department to access or examine the records of brokers and investment advisors as otherwise provided by law.

SECTION 10.

[NEW MATERIAL] CIVIL REMEDIES.-- A.

An eligible adult or an attorney-in-fact, conservator, temporary conservator or trustee acting for or on behalf of an eligible adult may commence a civil action in a court of competent jurisdiction against a person suspected of financially exploiting an eligible adult in order to:

(1) return property;

(2) stop or enjoin a transaction;

(3) return any profit received from a transaction;

(4) seek compensatory damages for a e t 17 transaction;

or w l n d 18 (5) void or rescind a transaction.

= = 19 a l B.

To prevail on a claim made pursuant to this i a e r 20 section, the plaintiff shall prove by a preponderance of the a t m m 21 evidence that financial exploitation occurred.

d r e 22 C.

Punitive damages shall be awarded when a c e s k 23 plaintiff proves that the defendant committed financial e a n b 24 exploitation and:

u [ (1) acted with knowledge that the transaction .218474.1 - 12 - was wrongful;

(2) made a transaction in indifference or reckless disregard for the financial interests of the eligible adult that resulted in financial harm to the eligible adult;

and (3) failed to cure the alleged financial exploitation within fifteen days of receiving notice of intent to seek relief from the plaintiff.

D.

If a plaintiff prevails against a defendant on a financial exploitation claim, the plaintiff shall recover reasonable attorney fees and any costs incurred while pursuing such relief.

E.

A remedy obtained pursuant to this section shall not limit in any way the right, title and interest of a good faith purchaser, mortgagee, holder of a security interest or other third party who obtains an interest in property e t 17 transferred from an eligible adult.

w l n d 18 F.

Relief obtained pursuant to this section shall = = 19 a l not affect the value of a mortgage.

i a e r 20 G.

Nothing in this section shall limit any other a t m m 21 cause of action under the laws of this state.

d r e 22 H.

When a plaintiff dies during the course of a c e s k 23 civil proceeding initiated pursuant to this section, the e a n b 24 personal representative of the plaintiff's estate may continue u [ with the proceeding;

provided that no proceeding made pursuant .218474.1 - 13 - to this section shall be initiated after the plaintiff's death.

A person who is found to have committed financial exploitation is liable for payment of the following e t 17 to the eligible adult:

w l n d 18 (1) the amount of restitution required to = = 19 restore the value of the property that the eligible adult would a l i a e r 20 have had if the financial exploitation had not occurred;

and a t m m 21 (2) any profit the defendant received through d r e 22 the financial exploitation.

- 14 - 12 14 16 e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 - 6 - e a n b 24 u [ .218474.1.220115.1