H 5300

SECTION 1. The General Laws, as appearing in the 2024 Official Edition, are hereby amended by inserting after chapter 167D the following CHAPTER 167D 1/2 FINANCIAL EXPLOITATION OF VULNERABLE ADULTS Section 1. As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:- “Adult protective services agency”, any office, division, department, or unit in the Commonwealth that is charged with the investigation of abuse, neglect, or exploitation of (i) elder adults or (ii) a disabled person, as defined in section 1 of chapter 19C of the General Laws, as so appearing. “Commissioner”, the commissioner of the division of banks or a designee. “Eligible adult”, (i) a person 60 years of age or older or (ii) a disabled person, as defined in section 1 of said chapter 19C, as so appearing. “Financial exploitation”, (i) the wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of an eligible adult; or (ii) any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of an eligible adult, to obtain control, use, or benefit of the eligible adult’s money, assets, or property to deprive the eligible adult of the ownership, use, benefit, or possession of his or her money, assets, or property through (A) deception, intimidation or undue influence; or (B) by the use any unethical or dishonest conduct; or (C) by converting money, assets, or property of the eligible adult to deprive such eligible adult of the ownership, use, benefit, or possession of his or her money, assets, or property. “Financial institution”, (a) any bank, trust company, co-operative bank or savings bank, if organized or exists under the laws of the Commonwealth or any other state or may transact business in the Commonwealth, a national bank, federal savings bank or federal savings and loan association, or any credit union that is organized or exists under the laws of the Commonwealth or any other state, or federal credit union or may transact business in the Commonwealth, as defined by section 1 of chapter 167 or section 1 of chapter 171 of the General Laws, as so appearing. “Qualified individual”, (i) any agent, employee, or person who serves in a supervisory, compliance, or legal capacity for a financial institution, and (ii) employees eligible for immunity in accordance with the Senior Safe Act of 2018. “Agency” (i) the commissioner, (ii) the disabled person protection commission established pursuant to section 2 of said chapter 19C, as so appearing, under the age of 60, and/or (iii) the executive office of elder affairs, if the eligible adult is 60 years or older. Section 2. If a financial institution or qualified individual reasonably believes that the financial exploitation of an eligible adult may have occurred, may have been attempted, or is being attempted, the financial institution or qualified individual may promptly notify the relevant agency. Section 3. If a financial institution or qualified individual acting in good faith and exercising reasonable care, believes that financial exploitation of an eligible adult may have occurred, may have been attempted, or is being attempted, a qualified individual may notify any third party previously designated by the eligible adult reasonably associated with the adult permitted under state or federal law, regulation or the rules organization of a self-regulatory organization; provided, however, that a qualified individual shall not notify any designated third party that is suspected of the financial exploitation or other abuse of the eligible adult. Section 4. A qualified individual who, in good faith, exercising reasonable care, complies with section 3, and did not participate or materially aid the alleged financial exploitation shall be immune from any administrative or civil liability that might otherwise arise from such action. Section 5. A financial institution may delay or stop a disbursement from, or a transaction in connection with, an account of an eligible adult or an account on which an eligible adult is a beneficiary if any qualified individual has reasonable cause to believe that, after initiating an internal review of the requested disbursement or transaction and documenting the suspected financial exploitation, that the requested disbursement or transaction may result in the financial exploitation of the eligible adult, and the financial institution or qualified individual; (i) provides written notification of the delay or stoppage and the reason for the delay or stoppage to all parties authorized to transact business on the account immediately, but in no event more than 2 business days after the requested disbursement or transaction, unless any such party is reasonably believed to have engaged in suspected or attempted financial exploitation of the eligible adult; (ii) provides notification of such delay or stoppage to the commissioner not more than 2 business days after the requested disbursement or transaction; (iii) the relevant agency; (iv) continues its internal review of the suspected or attempted financial exploitation of the eligible adult, as necessary; (v) provides status updates, a statement of finding and final disposition of an investigation upon request to the relevant agency and qualified individuals; and (vi) reports the investigation's results to the commissioner within 10 business days after the day the financial institution or qualified individual first delayed disbursement of the funds or the transaction. The commissioner shall retain a digital or other record of each notice and report received under clauses (ii), (iii), and (v) respectively, of this section. Section 6. The authorization of any delay or stoppage of a disbursement or transaction pursuant to section 5 shall expire upon the sooner of the determination by the financial institution that the disbursement or transaction will not result in the financial exploitation of the eligible adult, or 21 business days after the date on which the financial institution delayed or stopped disbursement of the funds or a transaction, unless the commissioner or either of the other agencies requests that the financial institution extend the delay, in which case the delay shall expire no more than 30 business days after the date on which the financial institution first delayed or stopped disbursement of the funds or a transaction unless otherwise terminated or further extended by either of the other agencies or an order of a court of competent jurisdiction. A court of competent jurisdiction may enter an order extending the delay or stoppage of a disbursement of funds or transaction pursuant to this section, or may order other protective relief, upon the petition of (i) the commissioner; (ii) the disabled persons protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older; (iii) a financial institution or qualified individual that initiated the delay pursuant to this section; or (4) another interested party. Section 7. A court of competent jurisdiction may order a financial institution or qualified individual to provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of an eligible adult to the commissioner, the disabled persons protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older, and law enforcement, either as part of a referral or to law enforcement pursuant to an investigation. Such records may include historical records and records pertaining to the most recent disbursement or transactions related to the suspected or attempted financial exploitation of an eligible adult. Records made available to the agencies pursuant to this section shall not be considered public records as defined in section 7 of chapter 4 or chapter 66 of the General Laws, as so appearing, and shall not be available for public examination. Section 8. A financial institution or qualified individual which, in good faith, exercising reasonable care, complies with this chapter, and did not participate or materially aid the alleged financial exploitation shall be immune from any administrative or civil liability that might otherwise arise from such action. Section 9. Nothing in this chapter shall limit or otherwise impede the authority of the secretary of the Commonwealth from accessing or examining the books and records of a broker-dealer or investment adviser as otherwise provided by law or conducting any lawful investigation into potential violations of chapter 110A of the General Laws, as so appearing. SECTION 2. The General Laws are hereby amended by inserting after chapter 110H the following chapter:- CHAPTER 110I FINANCIAL EXPLOITATION OF VULNERABLE ADULTS UNDER BROKER-DEALER RELATIONSHIP Section 1. As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:- “Agencies”, (i) the secretary of the Commonwealth and (ii) the disabled persons protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older. “Agent, as defined pursuant to section 401 of said chapter 110A, as so appearing. “Broker-Dealer”, as defined pursuant to section 401 of said chapter 110A, as so appearing. “Eligible adult”, a person 60 years of age or older or a disabled person, as defined pursuant to section 1 of chapter 19C, as so appearing. “Financial exploitation”, (i) the wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of an eligible adult; or (ii) any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of an eligible adult, to: (A) obtain control, through deception, intimidation or undue influence, over the eligible adult’s money, assets, or property to deprive the eligible adult of the ownership, use, benefit, or possession of his or her money, assets, or property; or (B) by the use of any unethical or dishonest conduct; or (C) convert money, assets, or property of the eligible adult to deprive such eligible adult of the ownership, use, benefit, or possession of his or her money, assets, or property. “Financial institution”, (a) any bank, trust company, co-operative bank or savings bank, if organized or exists under the laws of the Commonwealth or any other state or may transact business in the Commonwealth, a national bank, federal savings bank or federal savings and loan association, or any credit union that is organized or exists under the laws of the Commonwealth or any other state, or federal credit union or may transact business in the Commonwealth, as defined by section 1 of chapter 167 or section 1 of chapter 171 of the General Laws, as so appearing. “Investment adviser”, as defined pursuant to section 401 of said chapter 110A, as so appearing. “Investment adviser representative, as defined pursuant to section 401 of said chapter 110A, as so appearing. “Qualified investment individual” , (i) any agent, broker-dealer, investment adviser, investment- adviser representative, broker-dealer, or person who serves in a supervisory, compliance, investor protection or legal capacity for a broker-dealer or investment adviser, and (ii) employees eligible for immunity in accordance with the Senior Safe Act of 2018. Section 2. If a qualified investment individual reasonably believes that the financial exploitation of an eligible adult may have occurred, may have been attempted, or is being attempted, the qualified investment individual shall promptly notify the (i) secretary of the Commonwealth and (ii) the disabled person protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older. Section 3. A qualified investment individual who in good faith, exercising reasonable care, and did not participate or materially aid the alleged financial exploitation makes a disclosure of information pursuant to section 2 shall be immune from administrative or civil liability that might otherwise arise from such disclosure or for any failure to notify the customer of the disclosure. Section 4. If a qualified investment individual, acting in good faith and exercising reasonable care, believes that financial exploitation of an eligible adult may have occurred, may have been attempted, or is being attempted, a qualified investment individual may notify any third party previously designated by the eligible adult or reasonably associated with the adult permitted under state or federal law, regulation or the rules of a self-regulatory organization; provided, however, that a qualified investment individual shall not notify any designated third party that is suspected of the financial exploitation or other abuse of the eligible adult. Section 5. A qualified investment individual who, in good faith, exercising reasonable care, complies with section 4 and did not participate or materially aid the alleged financial exploitation shall be immune from any administrative or civil liability that might otherwise arise from such disclosure. Section 6. A financial institution may delay or stop a disbursement or transaction from an account of an eligible adult or an account on which an eligible adult is a beneficiary if (i) a qualified investment individual has reasonable cause to believe that, after initiating an internal review of the requested disbursement or transaction and the suspected financial exploitation, that the requested disbursement or transaction may result in the financial exploitation of the eligible adult, and the (ii) qualified investment individual: (A) provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account immediately, but in no event more than 2 business days after the delayed disbursement or transaction, unless any such party is reasonably believed to have engaged in suspected or attempted financial exploitation of the eligible adult; (B) provides notification of such delay to the agencies immediately but in no event not more than 2 business days after the delayed disbursement or transaction; and, (C) continues its internal review of the suspected or attempted financial exploitation of the eligible adult, as necessary, and provides status updates, a statement of finding and final disposition of an investigation upon request to the agencies and to qualified individuals. Section 7. The authorization of any delay or stoppage of a disbursement or transaction pursuant to section 6 shall expire upon the sooner of: (i) the determination by the financial institution or qualified investment individual that the disbursement or transaction will not result in the financial exploitation of the eligible adult; or, (ii) 21 days from the date the financial institution or qualified investment individual delayed disbursement of the funds or a transaction, unless either of the agencies requests that the financial institution extend the delay, in which case the delay shall expire no more than 30 business days after the date on which the financial institution first delayed disbursement of the funds or a transaction, unless otherwise terminated or further extended by either of the agencies or an order of a court of competent jurisdiction. A court of competent jurisdiction may enter an order extending the delay of a disbursement of funds or transaction pursuant to this section, or may order other protective relief, upon the petition of (i) the secretary of the Commonwealth (ii) the disabled persons protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older; (iii) the financial institution or qualified investment individual that initiated the delay pursuant to this section; or (iv) another interested party. Section 8. A court of competent jurisdiction may order a financial institution, or qualified investment individual to provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of an eligible adult to the state secretary, the disabled persons protection commission established pursuant to section 2 of said chapter 19C, as so appearing, if the eligible adult is under the age of 60, or the executive office of elder affairs, if the eligible adult is 60 years or older, and law enforcement, either as part of a referral or to law enforcement, or upon request of the agency or law enforcement pursuant to an investigation. Such records may include historical records and records pertaining to the most recent disbursement or transactions related to the suspected or attempted financial exploitation of an eligible adult. Records made available to agencies pursuant to this section shall not be considered public records as defined in said section 7 of said chapter 4 or said chapter 66, as so appearing, and shall not be available for public examination. Section 9. A financial institution or qualified investment individual who, in good faith, exercising reasonable care, complies with this chapter and did not participate or materially aid the alleged financial exploitation shall be immune from any administrative or civil liability that might otherwise arise from such action. Section 10. Notwithstanding Section 9, nothing in Section 9 shall limit or shield, in any manner, a qualified individual from any administrative or civil liability for any claim, for participating in or materially aiding the financial exploitation of an eligible adult. Any such civil claim may be asserted by the eligible adult, or on his or her behalf by an appropriate guardian or representative who is not involved in or otherwise suspected of participating in the financial exploitation of the eligible adult, by filing a civil action in a court of competent jurisdiction. Such a claimant shall have the burden of proving that the defendant is not eligible for the immunity provided in Section 9. Section 11. Nothing in this chapter shall limit or otherwise impede the authority of the secretary of the Commonwealth from accessing or examining the books and records of a financial institution as otherwise provided by law or conducting any lawful investigation into potential violations of said chapter 110A, as so appearing.