BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Leland Y. Yee, Chair
BILL NO: AB 477
A
AUTHOR: Chau
B
VERSION: May 6, 2013
HEARING DATE: June 11, 2013
4
FISCAL: No
7
7
CONSULTANT: Mareva Brown
SUBJECT
Elder and dependent adult abuse: mandated reporting
SUMMARY
This bill would include notaries public in the definition
of mandated reporters of suspected financial abuse of an
elder or dependent adult and would require a notary public,
except as provided, to report known or suspected instances
of financial abuse of an elder or dependent adult if the
notary public has observed or has knowledge of suspected
financial abuse in connection with providing notary
services.
ABSTRACT
Existing law :
1) Establishes the Elder Abuse and Dependent Adult
Civil Protection Act to protect the state's elder and
dependent adults from abuse. Within the Act, declares
that infirm elderly persons and dependent adults are a
disadvantaged class, that cases of abuse of these
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persons are seldom prosecuted as criminal matters and
that few civil cases are brought in connection with
this abuse due to problems of proof, court delays and
the lack of incentives to prosecute these suits. (WIC
15600 et seq.)
2) Defines as a mandated reporter any person who has
assumed full or intermittent responsibility for the
care or custody of an elder or dependent adult,
whether or not he or she receives compensation,
including administrators, supervisors and any licensed
staff of a public or private facility that provides
care or services for elder or dependent adults, or any
elder or dependent adult custodian, health
practitioner, clergy member or employee of a county
adult protective services agency or a local law
enforcement agency. (WIC 15630 (a))
3) Establishes that mandated reporters must report
physical abuse, abandonment, abduction, isolation,
financial abuse, or neglect, as specified (WIC 15630
(b)(1), and defined. (WIC 15610 et seq.)
4) Defines financial abuse of an elder or dependent as
occurring when a person or entity does any of the
following:
a. Takes, secretes, appropriates, obtains,
or retains real or personal property of an elder
or dependent adult for a wrongful use or with
intent to defraud, or both.
b. Assists in taking, secreting,
appropriating, obtaining, or retaining real or
personal property of an elder or dependent adult
for a wrongful use or with intent to defraud, or
both.
c. Takes, secretes, appropriates, obtains,
or retains, or assists in taking, secreting,
appropriating, obtaining, or retaining, real or
personal property of an elder or dependent adult
by undue influence, as defined in Section 1575 of
the Civil Code. (WIC 15610.30)
5) Defines as mandated reporters all officers and
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employees of financial institutions to include:
a. A depository institution, such as a bank
or savings association, as defined in the Federal
Deposit Insurance Act. (12 U.S.C. § 1813 (u)
Section 3 (c))
b. An institution-affiliated party, such as
the director, officer, employee, or controlling
stockholder, as defined in the Federal Deposit
Insurance Act. (12 U.S.C. § 1813 (u) Section
3(u))
c. A federal or state credit union, as
specified. (WIC 15630.1)
6) Requires any mandated reporter of suspected
financial abuse of an elder or dependent adult who has
direct contact with that adult or reviews or approves
that adult's financial documents, as specified, to
report known or suspected abuse immediately or as soon
as practicably possible, as specified. (WIC
15630.1(d)(1))
7) Establishes in the duties of attorneys practicing
in California the duty to maintain the confidence, and
at every peril to himself or herself, to preserve the
secrets, of his or her client, as specified. (BPC 6068
(e)(1))
This bill :
1) Clarifies that the reporting duties in existing
statute that relate to financial abuse involving an
elder or dependent adult apply solely to an officer or
employee of a financial institution.
2) Adds to the list of mandated reporters any notary
public who, in connection with providing notary
services, has observed or has knowledge of suspected
financial abuse of an elder or dependent adult and
subjects them to the same reporting requirements as
established for reporters within financial
institutions.
3) Clarifies that the responsibility of a notary
public who is also an officer or employee of a
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financial institution falls under the financial
institution reporting duties, and not under this
bill's notary public requirements.
4) Exempts the notary from mandated reporting if the
information to be reported is protected from
disclosure by the attorney-client privilege or the
notary public is subject to the duty of an attorney,
as defined under the attorney-client privilege
statute.
FISCAL IMPACT
This bill was not referred for analysis to the Assembly
Appropriations committee.
BACKGROUND AND DISCUSSION
Purpose of the bill
Including notaries public in the category of professionals
who are mandated to report suspected financial abuse of
elders will provide an additional layer of protection for
elders and dependents who are being abused, according to
the author.
The author notes that notaries public play a key role in
lending integrity to important transactions of commerce and
law through the verification of signatures and of legal
transactions. Their exposure to a wide array of legal
documents places them in a key position to recognize
potential instances of financial elder or dependent adult
abuse. Because notaries public have the opportunity to
review legal documents and to spot potential instances of
abuse, notaries public should be made mandated reporters of
suspected financial abuse of an elder or dependent adult in
the State of California, according to the author.
Elder Financial Abuse
The growing problem of elder financial abuse has become a
key concern in California and across the nation, as reports
of the numbers of seniors who have fallen victim to
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financial crimes grows.
In November 2012, the U.S. General Accounting Office
reviewed policies in California and four other states in an
effort to recommend a national strategy to track and combat
financial abuse of seniors. The GAO noted that older adults
are especially vulnerable to exploitation because they tend
to possess more wealth than those who are younger
generally, because they have had a longer time to acquire
it. At the same time, the incidence of Alzheimer's disease
and other dementias that undermine judgment increases with
age. A senior's financial capacity-the capacity to manage
money and financial assets in ways that meet one's
needs-generally declines with age.
The report, which calls for a national strategy to address
the problem of elder financial abuse, goes on to say that
Adult Protective Services agencies and law enforcement are
at the forefront of preventing, detecting and responding to
cases of financial abuse but that financial institutions
have become key players in identifying potential cases of
abuse.<1>
According to a 2007 brochure on elder financial abuse
published by the California Welfare Directors Association,
which represents California counties' Adult Protective
Services units, every 10 seconds a senior in California is
a victim of financial abuse yet just 1 in 100 incidents of
elder financial abuse is ever reported. The report said
that $4.8 billion in assets are at stake every year in
California.
Although there are cases of financial abuse
that are committed by strangers, door-to-door
salesmen, con artists, and the like, the vast
majority of cases involve a caregiver,
including family members. Using deception,
threats, intimidation, guilt, and other forms
of manipulation, these individuals take
property and other assets for their own use.
This close familial connection is one reason
-------------------
<1> "ELDER JUSTICE: National Strategy Needed to Effectively
Combat Elder Financial Exploitation," US General Accounting
Office, November 2012, Page 7-9.
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why financial abuse is often not reported.
Victims may be embarrassed, or afraid to report
the crime, fearing the family member will
retaliate and place them in a nursing home, or
worse yet, abandon them without the resources
or ability to care for themselves. Depression,
grief, guilt, and shame also contribute to the
under-reporting of this type of abuse.<2>
Mandated Reporting
The Elder Abuse and Dependent Adult Civil Protection Act
(WIC 15600 et seq.) defines legal requirements for who is
required to report suspected incidents of abuse, and under
what circumstances.
Included in the list of mandated reporters are
administrators, supervisors, and any licensed staff of a
public or private facility that provides care or services
for elder or dependent adults, or any elder or dependent
adult care custodian, health practitioner, clergy member,
or employee of a county adult protective services agency or
a local law enforcement agency. It does not limit the
responsibility to paid caregivers, but defines as mandated
reporters any person who has assumed full or intermittent
responsibility for the care or custody of an elder or
dependent adult, whether or not he or she receives
compensation.
The law requires that a report must be filed if any
mandated reporter, either through a professional capacity
or within their scope of employment, has observed, has
knowledge of or reasonably suspects that an incident
appears to be physical abuse, abandonment, abduction,
isolation, financial abuse, or neglect - or is told by an
elder or dependent adult that he or she has experienced
behavior constituting abuse. Mandated reporters have the
option of making a telephone call, or filing a report
online "immediately or as soon as practicably possible."
Additionally, financial crimes against elderly persons are
required to be reported when a mandated reporter who has
-------------------------
<2> "Anna and Joe: The importance of Adult Protective
Services in the fight against elder financial abuse,"
California Welfare Directors Association, February 2007.
STAFF ANALYSIS OF ASSEMBLY BILL 477 (Chau)
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direct contact with the elder or dependent adult or who
reviews or approves the elder or dependent adult's
financial documents in order to provide financial services
observes, suspects or has knowledge of an incident that
reasonably appears to be financial abuse. If a mandated
reporter does not have direct contact with the elder or
dependent adult, this assessment may be based solely on the
information before him or her at the time of reviewing or
approving the document, record, or transaction in the case.
The criteria for suspecting financial abuse is defined as
when a mandated reporter observes or has knowledge of
behavior or unusual circumstances or transactions, or a
pattern of behavior or unusual circumstances or
transactions, that would lead an individual with like
training or experience, based on the same facts, to form a
reasonable belief that an elder or dependent adult is the
victim of financial abuse.
California statute establishes a civil penalty not
exceeding $1,000 or if the failure to report is willful, a
civil penalty not exceeding $5,000, for failing to report
suspected financial abuse, and designates that the fine
shall be paid by the financial institution that is the
employer of the mandated reporter.
Reported incidents of financial abuse
Since the Financial Elder Abuse Reporting Act of 2005 took
effect, reports of financial abuse from banking and
financial institutions has climbed steadily, from more than
6,663 reports of elder or dependent financial abuse in 2009
to nearly 10,000 reports in 2012, according to data
compiled and reported by California Department of Social
Services.
Notaries Public
According to the National Notary Association, there were
approximately 161,000 notaries registered with the
Secretary of State in California as of May 1, 2013. To
qualify as a notary, an individual must be at least 18
years old, be a legal California resident, complete a
course and pass a written exam approved by the Secretary of
State, and clear a background check. Duties of a Notary
Public in California may include administering oaths and
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affirmations, taking affidavits and depositions and
certifying copies of specified documents, among other
tasks.
Related legislation
AB 1525 (Allen) Chapter 632, Statutes of 2012, requires
specified money transmission licensees to provide each of
their agents with training materials on recognizing elder
or dependent adult financial abuse, and on the appropriate
response to suspected elder or dependent adult financial
abuse in a transaction.
SB 33 (Simitian) Chapter 372, Statutes of 2011, deleted the
sunset date on mandated reporting of financial crimes
against elder and dependent adults.
SB 718 (Vargas) Chapter 373, Statutes of 2011, authorize
mandated reporters to submit reports through a confidential
Internet reporting tool.
AB 2105 (DeSaulnier 2007) would expand the category of
mandated reporters of suspected financial abuse to include
licensees and employees of licensees engaged in lending or
servicing activities, except for those employees involved
solely in administrative or clerical practices. The bill
also would require existing consumer protection courses to
include instruction in financial elder and dependent adult
abuse signs and reporting requirements. Vetoed by Governor.
Arguments in Support
Both the California Welfare Directors Association (CWDA)
and California Association for Health Services at Home
(CAHSAH) argue that notaries have unique vantage points on
critical financial transactions and should be included in
those mandated to report suspected financial abuse.
"Existing law mandates numerous healing professions to
report suspected elder abuse. The inclusion of public
notaries will help to identify elder financial abuse
because wills, trusts and other estate documents require
the utilization of the services of public notaries when
they are being completed. As the aging population continues
to grow, additional protections are necessary and should be
required in law for the protection of this population,"
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writes CAHSAH.
Arguments in Opposition
The California Land Title Association (CTLA) and California
Escrow Association (CEA) write that the amount of time a
notary spends with an elderly or disabled client is
insufficient to thoroughly evaluate whether the specific
transaction could involve elder abuse.
"While CTLE and CEA think the goals of this bill are
certainly laudable, we believe that creating liability for
title and escrow company personnel who are notaries is
unwarranted, poor public policy and assumes that the
exposure to the senior citizen is satisfactory to provide
them with all of the information necessary to evaluate the
signer's mental capacity and whether or not the transaction
is considered elder abuse," the two organizations wrote
jointly.
The National Notary Association writes that instead of
requiring notaries to report suspected financial abuse,
there should be statute requiring any individual who is
signing a document to demonstrate "a basic mental awareness
at the time of notarization and to demonstrate he or she is
signing the document as his or her own act and deed apart
from coercion or duress."
COMMENTS
Sometimes a notary public may wear multiple hats. Thus, the
author's inclusion of the language 15630.1 (d) (2) section
(b), which clarifies that if a notary public is also
covered under existing statute mandating reporting for
financial officers or employees of a financial institution,
they are subject to the mandates in that section of law.
Section 15630.1 (d) (2) (c) similarly tries to clarify that
when a notary public is also an attorney, or is acting
under direction of an attorney, existing statute governing
attorney-client privilege takes precedence. The author's
office has heard from advocates who variously want to
include additional individuals in this exclusion or permit
no attorneys to be excluded. Should this bill be passed by
the Human Services Committee, staff recommends this
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language be clarified in the Judiciary Committee.
PRIOR VOTES
Assembly Floor 59 - 16
Assembly Aging and Long Term Care: 6 - 1
POSITIONS
Support: California Senior Legislature (sponsor)
AARP California
AFSCME / AFL-CIO
California Association for Health Services
at Home
California Commission on Aging
California Police Chiefs Association
California Welfare Directors Association
Consumer Attorneys of California
Consumer Federation of California
California Long Term Ombudsman Association
California State Long Term Ombudsman
1 individual
Oppose: California Escrow Association (via California
Advocates)
California Land Title Association
National Notary Association
28 individuals
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