Two bills to protect elderly and vulnerable adults from financial exploitation are headed to the Senate floor for a final vote after being approved in Senate committees this week. Senate Bill 1192, sponsored by Senator Todd Gardenhire (R-Chattanooga), and Senate Bill 1267, sponsored by Senate Majority Leader Mark Norris (R-Collierville), gives securities officials and financial institutions the tools they need to help detect and prevent financial exploitation of those age 65 and older and vulnerable adults with diminished capacity.
The legislation comes from the Elderly and Vulnerable Adult Abuse Task Force, which worked with Tennessee’s financial community to recommend the changes.
“Roughly one in five seniors has been a victim of financial exploitation at a cost of approximately $2.9 billion annually,” said Senator Gardenhire. “Moreover, these numbers are likely low as it is also estimated that only one out of every 44 instances of financial abuse is actually reported.”
Called the Senior Financial Protection and Securities Modernization Act, Senate Bill 1192:
· Provides a pathway for voluntary reporting by giving civil and administrative immunity to broker-dealers, investment advisers, agents, representatives and other qualified individuals for reporting the suspected abuse or exploitation;
· Allows those individuals to delay disbursements from an account for up to 15 days if financial abuse or exploitation is suspected (that delay could be extended to up to 25 days upon request by the commissioner and by court order);
· Grants the Commissioner of Commerce and Insurance authority to create additional guidelines by rule for delayed-disbursement when fraudulent activities are suspected;
· Authorizes notification to third parties previously designated by the elderly or vulnerable adult regarding any suspected fraudulent transactions; and,
· Gives the Commissioner authority, under the state’s Uniform Administrative Procedures Act, to double current civil penalties to up to $10,000 to $20,000 per violation against offenders who victimize a vulnerable or senior adult.
“Financial exploitation robs elderly victims of their money and their dignity,” said Senator Gardenhire, who is a retired financial advisor. “It also can rob them of their independence and can even force them into depending on government assistance despite their best efforts to save for their golden years.”
It has been estimated that 41.4 percent of the offenses of financial exploitation were committed by a family member and another 13.3 percent of victims were described by law enforcement as having close relationships with the perpetrator.
Likewise, Senate Bill 1267 adds tools and greater flexibility as to how financial institutions can best protect their customers when they have reason to suspect financial exploitation of elderly or vulnerable adults is occurring or being attempted. The legislation:
· Provides new authority for financial institutions to delay or refuse to conduct transactions which permit the disbursement of funds from the account of an elderly customer or vulnerable adult when exploitation is suspected;
· Permits, but doesn’t require, the financial institution to establish a list of persons the customer would like to have contacted if the institution suspects the customer is a victim of financial exploitation or theft;
· Allows financial institutions to refuse to accept an authorized power of attorney if they believe the person is conducting financial exploitation; and,
· Requires the Tennessee Department of Financial Institutions to consult with financial service providers, the Tennessee Commission on Aging and Disability, and the Department of Human Services to develop a public education campaign to alert the public to the dangers of vulnerable adults from financial exploitation.
“Bankers are often on the frontlines of witnessing attempted exploitation and these tools will give them greater flexibility to protect vulnerable Tennesseans,” said Sen.
The proposals build on a new law, sponsored by Norris and passed by the General Assembly last year, which set up Vulnerable Adult Protective Investigative Teams (VAPIT) in each judicial district in Tennessee to foster cooperation and information sharing between different government agencies whose purpose is to protect elderly and vulnerable adults.