Proposed Bill Would Require Calif. CU Employees to Report Suspected Elder Abuse or Face Misdemeanor Charges

SACRAMENTO, Calif. – California lawmakers are proposing legislation that would require credit union employees to report known or suspected elder abuse to authorities. While credit unions don’t dispute the importance of the intent of the measures, they take issue with the penalties for lack of compliance – failure to do so could result in a misdemeanor charge. It’s an issue in fact that have both credit union and bank groups in opposition to the bills. SB1018, introduced by Senator Joseph Simitian, (D-Palo Alto) passed through the Senate Public Safety Committee April 20. The bill would require all employees of financial institutions to act as “mandated reporters,” persons currently required by law to report known or suspected elder abuse. The bill specifies the inclusion of all federally and state chartered credit unions in California. A similar bill, AB1605, has been introduced by Assemblywoman Lois Wolk (D-Davis). “We are opposed to these bills, unless amended,” said Mark Lowe, California Credit Union League spokesman. “Our main concern is the criminal sanctions, making credit union staff mandatory reporters that are subject to criminal prosecution if they fail to report abuse. Instead, the League would support an amended bill that eliminates criminal liability, replacing it with required mandatory training regarding elder financial abuse and how to detect it. Placing criminal liability on front-line employees is not the best way to avoid elder abuse, Lowe said. “The person who is most likely to interact with someone who is being abused is an entry level teller – someone who doesn’t have a lot of experience, who doesn’t know the member well enough to know if something fishy is happening,” Lowe explained. He continued, “A teller is not like a nursing aide or a relative who has had long term exposure to a person and is better trained to see signs of abuse – physical, emotional or financial. The teller transaction could last only 30 seconds, which is not enough time to determine whether or not abuse is occurring.” Although the bill imposes criminal penalties on those who fail to report abuse, it does provide some safeguards for credit union employees and officers, provided they act in good faith. For example, mandated reporters are immune from criminal or civil liability as a result of required reporting, even if an investigation concludes that no abuse is taking place. The only exception to this immunity applies to those who make false reports. However, such immunity does not completely eliminate the possibility of civil legal action; as such, the bill also provides for the recovery of related legal expenses up to $50,000. Industry groups are also concerned with the implications the bill might have on current privacy laws, including the Financial Services Modernization Act of 1999, popularly known as the Gramm-Leach-Bliley Act. Institutions fear that if they report suspected abuse to local authorities, they will violate federal or state privacy laws. A 2003 report published by the American Bar Association entitled “Can Bank Tellers Tell? – Legal Issues Relating to Banks Reporting Financial Abuse of the Elderly,” disputes those concerns. According to the report, the Gramm-Leach-Bliley Act contains several exemptions that permit the disclosure of personal information in order to comply with laws that protect public safety. These exemptions do not require previous customer notification, nor are they subject to opt-out lists. However, the ABA report noted that some state privacy laws do not permit disclosure to adult protective services agencies, and if bills such as the one proposed in California pass, financial privacy laws must be amended to allow mandated abuse reporting. Additionally, the report admits that while immunity statutes protect employees, protection for the institution is not clearly stated. Such is the case with SB1018, which makes no mention of immunity for the employer of the mandated reporter. In many states, the term “person” is interpreted broadly to include corporations and other entities. However, the ABA report suggests that statutory amendments be included in proposed elder abuse legislation to clarify who or what is protected by immunity. Industry groups, including the California Credit Union League, support an amended alternative bill proposed by State Assemblyman Mike Gordon (D-El Segundo). Gordon’s bill, AB1664, does not apply the mandatory reporter title to financial institution employees, thus eliminating the criminal liability proposed by SB1018. Authorities could also override California privacy law to request customer information while investigating suspected abuse cases. Finally, the bill would grant unconditional civil immunity to employees, regardless of whether they reported suspected abuse or not. The League would support this bill if the mandatory training clause was added, Lowe said. Currently, three states require financial institution employees to act as mandated reporters for suspected elder financial abuse: Florida, Georgia and Mississippi. Fifteen other states require “any person” to report suspected abuse, which would include employees of financial institutions. A previous effort to mandate reporting in California financial institutions failed in 2001, thanks to active lobbying efforts. Current lobbying efforts are underway in both the banking and credit union sectors. The CCUL e-mailed member credit unions earlier this month, requesting they send letters to Senators who have gone on record as supporting the bill. The League provided contact information for Senators, as well as recommended text for the letters. SB1018 is scheduled next to move to the Senate Judiciary Committee, although a hearing date has not yet been set. “It’s still very early in the game, we intend to keep working with both Sen. Simitian and Assemblywoman Wolk to get this resolved in a way that will both contribute to increased reporting, yet not subject front line tellers to criminal sanctions,” Lowe said. -