The California Elder Financial Abuse Prevention Act.
What changed between versions
A new Division 27 titled 'California Elder Financial Abuse Prevention Act' was added to the Financial Code, expanding the bill from a simple regulatory plan requirement into a full statutory framework governing how depository institutions can protect vulnerable adults from financial abuse.
Depository institutions may notify an associated third party (such as a family member or attorney) when they believe an eligible adult may be a victim of financial abuse, and this disclosure is explicitly exempt from state privacy laws. Institutions may choose not to notify if they believe the third party engaged in the abuse.
New definitions were added for 'eligible adult' (person 65 or older, or person 18 or older with a substantial mental or functional impairment where the institution has actual knowledge they are a dependent adult), 'financial abuse' (taking property, or obtaining control through deception, intimidation, or undue influence), 'depository institution' (licensed bank or credit union), and 'associated third party' (authorized contacts, family members, agents under power of attorney, attorneys, trustees, guardians, conservators, and other fiduciaries).
Depository institutions are now authorized to delay or refuse transactions, prevent withdrawals or disbursements, block changes in account ownership, prevent transfers to another person's account, refuse instructions from agents under a power of attorney, and prevent beneficiary designation changes when they believe an eligible adult may be a victim or target of financial abuse.
The authority to delay a transaction expires after 30 business days unless the institution is satisfied the transaction will not result in financial abuse, a court orders release of funds, or the institution extends the delay based on reasonable belief that abuse may continue to occur or be attempted.
New legal safe harbors were added: refusing a transaction does not constitute wrongful dishonor under the Commercial Code, a reasonable belief that payment would facilitate financial abuse constitutes reasonable grounds to doubt collectability under federal check-clearing and funds-availability laws, and delays do not violate the Commercial Code's funds transfer provisions.
