NY State Senate Bill 2023-S1071

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to consumer protection
Jan 10, 2023	referred to consumer protection

co-Sponsors

2023-S1071 (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Add §359-eeee, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S8854
2025-2026: S1293

2023-S1071 (ACTIVE) - Summary

Allows for investment advisers and firms to disclose potential financial exploitation of elderly and vulnerable adults to the commissioner of the department of financial services and to halt disbursements from an account if an adviser or firm believes that financial exploitation is occurring.

2023-S1071 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1071

SPONSOR: BORRELLO
 
TITLE OF BILL:

An act to amend the general business law, in relation to preventing the
financial exploitation of older and vulnerable adults

 
PURPOSE:

To protect older and vulnerable New Yorkers from financial exploitation
by allowing qualified individuals to delay questionable withdrawals from
a client's account and notify adult protective services and the commis-
sioner of the department of financial services.

 
SUMMARY OF PROVISIONS:

Section 1 amends the general business law by adding a new section for
the purpose of preventing the financial exploitation of elderly and
vulnerable adults, including:

359-eeee(1): defines the relevant terms including eligible adult, finan-

cial exploitation, qualified individual, investment advisor, broker and
dealer. A qualified individual is defined as any agent, representative
or person who serves in a supervisory, compliance, or legal capacity for
a broker-dealer or investment advisor. An eligible adult is defined as a
person sixty-five years of age or older, or subject to adult protective
services.

359-eeee(2): allows a qualified individual to notify adult protective
services and the commissioner of the department of financial services
upon a reasonable belief that financial exploitation of an eligible
adult may have occurred, may have been attempted, or is being attempted,
and provides that he/she shall be immune from administrative or civil
liability for such disclosure.

359-eeee(3): allows a qualified individual to notify any third-party
previously designated by the eligible adult, and provides that he/she
shall be immune from administrative or civil liability for such disclo-
sure.

359-eeee(4): allows a broker-dealer or investment advisor to delay a
disbursement from the account of an eligible adult if certain conditions
are met, including written notification of the delay.  Requires that any
delay of a disbursement expire after fifteen days or upon a determi-
nation that the disbursement will not result in financial exploitation,
unless the department of financial services or a court extends the
delay. This section also provides that a broker-dealer or investment
advisor that complies with the law in good faith and exercises reason-
able care is immune from any administrative or civil liability that
might otherwise arise from a delay in a disbursement.

359-eeee(5): requires a broker-dealer or investment advisor to provide
access to or copies of records that are relevant to the suspected or
attempted financial exploitation of an eligible adult to the appropriate
agencies and law enforcement.

Section 2 sets forth the effective date.

 
JUSTIFICATION:

Older and vulnerable adults are at greater risk of being victims of
financial exploitation. The Office of Children and Family Services esti-
mates that the financial loss to vulnerable elderly New Yorkers is
approximately $1.5 billion each year.

Although New York State allows banks to place a hold on the bank account
of a vulnerable person when they suspect financial exploitation of a
vulnerable person, this bill would strengthen immunity protections and
create a reporting mechanism allowing more individuals to report finan-
cial exploitation. Furthermore, it would allow qualified individuals to
delay the disbursement of funds from the account of an eligible adult
and to notify the appropriate authorities without liability that might
otherwise result from a delay or disclosure.

Thirty-two states have adopted their version of a similar "report and
hold" law based on the North American Securities Administrators Associ-
ation's model act to protect vulnerable adults from financial exploita-
tion. This amendment would also complement existing Federal law, which
offers protections to fewer individuals and requires individuals to
receive specialized training to qualify for receiving immunity for
reporting.

 
PRIOR LEGISLATIVE HISTORY:

2022: S8854

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S1071 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1071
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2023
                                ___________
 
 Introduced by Sens. BORRELLO, SANDERS -- read twice and ordered printed,
   and  when  printed  to  be  committed  to  the  Committee  on Consumer
   Protection
 
 AN ACT to amend the general business law, in relation to preventing  the
   financial exploitation of older and vulnerable adults

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 359-eeee to read as follows:
   § 359-EEEE. PREVENTION  OF  FINANCIAL  EXPLOITATION  OF  ELDERLY   AND
 VULNERABLE  ADULTS. 1. FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "ELIGIBLE ADULT" MEANS:
   (I) A PERSON SIXTY-FIVE YEARS OF AGE OR OLDER; OR
   (II) A PERSON SUBJECT TO ADULT PROTECTIVE SERVICES.
   (B) "FINANCIAL EXPLOITATION" MEANS:
   (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:
   (1)  OBTAIN  CONTROL,  THROUGH DECEPTION, INTIMIDATION OR UNDUE INFLU-
 ENCE, OVER SUCH ELIGIBLE ADULT'S MONEY, ASSETS OR  PROPERTY  TO  DEPRIVE
 SUCH  ELIGIBLE ADULT OF THE OWNERSHIP, USE, BENEFIT OR POSSESSION OF HIS
 OR HER MONEY, ASSETS OR PROPERTY; OR
   (2) CONVERT MONEY, ASSETS  OR  PROPERTY  OF  SUCH  ELIGIBLE  ADULT  TO
 DEPRIVE SUCH ELIGIBLE ADULT OF THE OWNERSHIP, USE, BENEFIT OR POSSESSION
 OF HIS OR HER MONEY, ASSETS OR PROPERTY.
   (C)  "QUALIFIED  INDIVIDUAL" MEANS ANY AGENT, REPRESENTATIVE OR PERSON
 WHO SERVES IN A SUPERVISORY, COMPLIANCE, OR LEGAL CAPACITY FOR  A  BROK-
 ER-DEALER OR INVESTMENT ADVISER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03987-01-3

 S. 1071                             2
 
   (D)  "INVESTMENT  ADVISOR" SHALL HAVE THE SAME MEANING AS SUCH TERM IS
 DEFINED PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE  OF  SECTION  THREE
 HUNDRED FIFTY-NINE-EEE OF THIS ARTICLE.
   (E)  "BROKER"  AND  "DEALER" SHALL HAVE THE SAME MEANING AS SUCH TERMS
 ARE DEFINED PURSUANT TO PARAGRAPHS (A) AND (B)  OF  SUBDIVISION  ONE  OF
 SECTION THREE HUNDRED FIFTY-NINE-E OF THIS ARTICLE.
   2.  (A)  IF  A QUALIFIED INDIVIDUAL REASONABLY BELIEVES THAT FINANCIAL
 EXPLOITATION OF AN ELIGIBLE ADULT  MAY  HAVE  OCCURRED,  MAY  HAVE  BEEN
 ATTEMPTED, OR IS BEING ATTEMPTED, SUCH QUALIFIED INDIVIDUAL MAY PROMPTLY
 NOTIFY  ADULT PROTECTIVE SERVICES AND THE COMMISSIONER OF THE DEPARTMENT
 OF FINANCIAL SERVICES.
   (B) A QUALIFIED INDIVIDUAL THAT IN GOOD FAITH AND  EXERCISING  REASON-
 ABLE CARE MAKES A DISCLOSURE OF INFORMATION PURSUANT TO PARAGRAPH (A) OF
 THIS  SUBDIVISION 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.
   3.  (A)  IF  A QUALIFIED INDIVIDUAL REASONABLY BELIEVES THAT FINANCIAL
 EXPLOITATION OF AN ELIGIBLE ADULT  MAY  HAVE  OCCURRED,  MAY  HAVE  BEEN
 ATTEMPTED,  OR  IS BEING ATTEMPTED, SUCH QUALIFIED INDIVIDUAL MAY NOTIFY
 ANY THIRD-PARTY PREVIOUSLY DESIGNATED BY THE ELIGIBLE ADULT.  DISCLOSURE
 SHALL  NOT  BE  MADE  TO ANY DESIGNATED THIRD-PARTY THAT IS SUSPECTED OF
 FINANCIAL EXPLOITATION OR OTHER ABUSE OF THE ELIGIBLE ADULT.
   (B) A QUALIFIED INDIVIDUAL THAT, IN GOOD FAITH AND EXERCISING  REASON-
 ABLE  CARE,  COMPLIES  WITH  PARAGRAPH  (A) OF THIS SUBDIVISION SHALL BE
 IMMUNE FROM ANY ADMINISTRATIVE OR CIVIL LIABILITY THAT  MIGHT  OTHERWISE
 ARISE FROM SUCH DISCLOSURE.
   4.  (A) A BROKER-DEALER OR INVESTMENT ADVISER MAY DELAY A DISBURSEMENT
 FROM AN ACCOUNT OF AN ELIGIBLE ADULT OR AN ACCOUNT ON WHICH AN  ELIGIBLE
 ADULT IS A BENEFICIARY IF:
   (I)  THE  BROKER-DEALER,  INVESTMENT  ADVISER, OR QUALIFIED INDIVIDUAL
 REASONABLY  BELIEVES,  AFTER  INITIATING  AN  INTERNAL  REVIEW  OF   THE
 REQUESTED  DISBURSEMENT  AND  THE SUSPECTED FINANCIAL EXPLOITATION, THAT
 THE REQUESTED DISBURSEMENT MAY RESULT IN FINANCIAL  EXPLOITATION  OF  AN
 ELIGIBLE ADULT; AND
   (II) THE BROKER-DEALER OR INVESTMENT ADVISER:
   (1) IMMEDIATELY, BUT IN NO EVENT MORE THAN TWO BUSINESS DAYS AFTER THE
 REQUESTED  DISBURSEMENT,  PROVIDES WRITTEN NOTIFICATION OF THE DELAY AND
 THE REASON FOR THE DELAY TO ALL PARTIES AUTHORIZED TO TRANSACT  BUSINESS
 ON  THE  ACCOUNT,  UNLESS  ANY SUCH PARTY IS REASONABLY BELIEVED TO HAVE
 ENGAGED IN SUSPECTED OR ATTEMPTED FINANCIAL EXPLOITATION OF THE ELIGIBLE
 ADULT;
   (2) IMMEDIATELY, BUT IN NO EVENT MORE THAN TWO BUSINESS DAYS AFTER THE
 REQUESTED DISBURSEMENT, NOTIFIES THE COMMISSIONER OF THE  DEPARTMENT  OF
 FINANCIAL SERVICES; AND
   (3) CONTINUES ITS INTERNAL REVIEW OF THE SUSPECTED OR ATTEMPTED FINAN-
 CIAL  EXPLOITATION  OF THE ELIGIBLE ADULT, AS NECESSARY, AND REPORTS THE
 INVESTIGATION'S RESULTS TO THE COMMISSIONER OF THE DEPARTMENT OF  FINAN-
 CIAL  SERVICES  WITHIN SEVEN BUSINESS DAYS AFTER THE REQUESTED DISBURSE-
 MENT.
   (B) ANY DELAY OF A DISBURSEMENT AS AUTHORIZED PURSUANT TO THIS SECTION
 SHALL EXPIRE UPON THE SOONER OF:
   (I) A DETERMINATION BY THE BROKER-DEALER OR  INVESTMENT  ADVISER  THAT
 THE DISBURSEMENT WILL NOT RESULT IN FINANCIAL EXPLOITATION OF THE ELIGI-
 BLE ADULT; OR
   (II)  FIFTEEN  BUSINESS DAYS AFTER THE DATE ON WHICH THE BROKER-DEALER
 OR INVESTMENT ADVISER FIRST DELAYED DISBURSEMENT OF  THE  FUNDS,  UNLESS
 S. 1071                             3
 
 THE  DEPARTMENT OF FINANCIAL SERVICES REQUESTS THAT THE BROKER-DEALER OR
 INVESTMENT ADVISER EXTEND THE DELAY,  IN  WHICH  CASE  THE  DELAY  SHALL
 EXPIRE  NO  MORE  THAN TWENTY-FIVE BUSINESS DAYS AFTER THE DATE ON WHICH
 THE  BROKER-DEALER  OR  INVESTMENT ADVISER FIRST DELAYED DISBURSEMENT OF
 THE FUNDS UNLESS SOONER TERMINATED BY EITHER THE DEPARTMENT OF FINANCIAL
 SERVICES OR AN ORDER OF A COURT OF COMPETENT JURISDICTION.
   (C) A COURT OF COMPETENT JURISDICTION MAY ENTER AN ORDER EXTENDING THE
 DELAY OF THE DISBURSEMENT OF FUNDS OR MAY ORDER OTHER PROTECTIVE  RELIEF
 BASED  ON  A PETITION OF THE COMMISSIONER OF THE DEPARTMENT OF FINANCIAL
 SERVICES, ADULT PROTECTIVE SERVICES,  THE  BROKER-DEALER  OR  INVESTMENT
 ADVISER THAT INITIATED THE DELAY PURSUANT TO THIS SUBDIVISION, OR ANOTH-
 ER INTERESTED PARTY.
   (D)  A  BROKER-DEALER  OR  INVESTMENT  ADVISER THAT, IN GOOD FAITH AND
 EXERCISING REASONABLE CARE, COMPLIES  WITH  THIS  SUBDIVISION  SHALL  BE
 IMMUNE  FROM  ANY ADMINISTRATIVE OR CIVIL LIABILITY THAT MIGHT OTHERWISE
 ARISE FROM SUCH DELAY IN A DISBURSEMENT IN ACCORDANCE WITH THIS SUBDIVI-
 SION.
   5. A BROKER-DEALER OR INVESTMENT ADVISER SHALL PROVIDE  ACCESS  TO  OR
 COPIES OF RECORDS THAT ARE RELEVANT TO THE SUSPECTED OR ATTEMPTED FINAN-
 CIAL EXPLOITATION OF AN ELIGIBLE ADULT TO AGENCIES CHARGED WITH ADMINIS-
 TERING  STATE  ADULT  PROTECTIVE  SERVICES  LAWS AND TO LAW ENFORCEMENT,
 EITHER AS PART OF A REFERRAL TO AN AGENCY OR TO LAW ENFORCEMENT, OR UPON
 REQUEST OF AN AGENCY OR LAW ENFORCEMENT PURSUANT  TO  AN  INVESTIGATION.
 THE RECORDS SHALL INCLUDE HISTORICAL RECORDS AS WELL AS RECORDS RELATING
 TO  THE MOST RECENT TRANSACTION OR TRANSACTIONS THAT MAY COMPRISE FINAN-
 CIAL EXPLOITATION OF AN ELIGIBLE ADULT. ALL RECORDS  MADE  AVAILABLE  TO
 AGENCIES  UNDER  THIS  SECTION  SHALL NOT BE CONSIDERED A PUBLIC RECORD.
 NOTHING IN THIS SUBDIVISION SHALL LIMIT OR OTHERWISE IMPEDE THE AUTHORI-
 TY OF THE COMMISSIONER OF THE DEPARTMENT OF FINANCIAL SERVICES TO ACCESS
 OR EXAMINE THE BOOKS AND RECORDS OF BROKER-DEALERS AND INVESTMENT ADVIS-
 ERS AS OTHERWISE PROVIDED BY LAW.
   § 2. This act shall take effect immediately.

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Senate Bill S1071

Sponsored By

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

co-Sponsors

2023-S1071 (ACTIVE) - Details

2023-S1071 (ACTIVE) - Summary

2023-S1071 (ACTIVE) - Sponsor Memo

2023-S1071 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1071

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Sponsored By

George M. Borrello

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

co-Sponsors

Peter Oberacker

James Sanders Jr.

2023-S1071 (ACTIVE) - Details

2023-S1071 (ACTIVE) - Summary

2023-S1071 (ACTIVE) - Sponsor Memo

2023-S1071 (ACTIVE) - Bill Text download pdf

Comments