BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1525|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1525
Author: Allen (D), et al.
Amended: 8/24/12 in Senate
Vote: 21
SENATE BANKING & FINANCIAL INST. COMM. : 4-2, 6/27/12
AYES: Vargas, Evans, Kehoe, Liu
NOES: Blakeslee, Walters
NO VOTE RECORDED: Padilla
ASSEMBLY FLOOR : 46-26, 5/17/12 - See last page for vote
SUBJECT : Elder or dependent adult financial abuse
SOURCE : California Senior Legislature
San Diego County District Attorney
DIGEST : This bill requires specified money transmission
licensees to provide, on or before April 1, 2013, and
annually thereafter, 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.
Senate Floor Amendments of 8/24/12 exempt from the bill's
requirements any money transmitter licensee that
exclusively offers its services via the Internet.
ANALYSIS : Existing law provides for the Money
Transmission Act (Division 1.2 of the Financial Code,
CONTINUED
AB 1525
Page
2
Section 2000 et seq.), as follows:
1. Corporations and limited liability companies are
eligible for licensure, as specified. Once licensed,
these entities employ "agents." Agents are defined as
persons who provide money transmission in California on
behalf of licensees. Agents do not include officers or
employees of licensees. Licensees are liable for the
transmission of money, once that money is received by an
agent.
2. Once licensed, licensees and the agents working on their
behalf are authorized to sell or issue payment
instruments, as defined (activities that would be
covered by this bill); sell or issue stored value (not
covered by this bill); and receive money for
transmission (covered by this bill).
This bill:
1. Requires, on or before April 1, 2013, and annually
thereafter, each corporation or limited liability
company licensed for money transmission provide its
agents under contract with training materials on
recognizing elder or dependent adult financial abuse,
and how to appropriately respond if the agent suspects
that he/she is being asked to engage in money
transmission for a fraudulent transaction involving an
elder or dependent adult.
2. Requires, to ensure that agents that are newly appointed
by licensees receive the training materials described
above in a timely manner, each licensee provide those
materials to any newly appointed agent no later than one
month following the appointment of that agent.
3. Specifies this bill does not apply to licensees that are
engaged solely in selling or issuing stored value.
Licensees that engage in money transmission activities
such as selling or issuing payment instrument or
receiving money for transmission shall be subject to
this bill only with respect to their agents under
contract for those activities.
AB 1525
Page
3
4. Exempts from the bill licensees who exclusively offer
their services via an Internet Web site.
Background
Wire transfer fraud. According to background information
provided by the author, using statistics from the National
White Collar Crime Center, 1,259 California seniors, aged
60 or older, lost a total of over $7.1 million during 2011,
via scams that involved wire transfers. From January to
March 15, 2012, 212 California seniors lost a total of just
under $2 million to scams involving wire transfers.
The Federal Trade Commission (FTC) reports that wire
transfers are the number one form of consumer scam. In
2010 alone, 43,866 complaints involving wire transfer scams
were made to the FTC. These scams involved people posing
as family members, friends, legitimate businesses,
sweepstake contests, and government entities. The author's
office observes that seniors are particularly vulnerable to
these scams, and are thus easy targets.
Regulation of money transmitters in California .
California's Money Transmission Act licenses businesses,
which then hire agents to perform authorized services. For
example, Western Union is a licensee, which hires several
thousand agents across California, including grocery
stores, convenience markets, and other storefronts, to
offer Western Union's money transmission services.
Protections currently exist under the Money Transmission
Act . The Money Transmission Act does not cap the amount of
money that may be transmitted by any individual. However,
the federal Bank Secrecy Act requires money services
businesses, including money transmitters, to register with
the Financial Crimes Enforcement Network (FinCEN). Each
entity that is registered with FinCEN is required to file a
cash transaction report for any deposit, withdrawal,
exchange of currency, or other payment or transfer that
exceeds $10,000. The reporting entity is required to
verify and record the name and address of the individual
presenting the transaction, as well as the identity,
account number, and social security number or tax
identification number of any person or entity on whose
AB 1525
Page
4
behalf the transaction is made. Multiple currency
transactions by or on behalf of the same person or entity
during a business day, including transactions conducted at
multiple locations of the same entity, must be aggregated.
Money services businesses are also required to file
suspicious activity reports with FinCEN when a transaction
conducted by, at, or through that business is both
suspicious and in an amount of $2,000 or more. A
transaction is suspicious, if the money services business
knows, suspects, or has reason to suspect that the
transaction involves funds derived from illegal acts, is
intended or conducted to hide or disguise funds derived
from illegal activity, is designed to evade the
requirements of the Bank Secrecy Act, or serves no business
or apparent lawful purpose, and for which there is no
reasonable explanation after examining all available facts.
The filing of a cash transaction report or a suspicious
activity report by a money transmitter does not invalidate
the money transfer that gave rise to those reports.
Instead, the Department of Financial Institutions uses
information that its licensees have filed with FinCEN
during its periodic examinations of those licensees.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/15/12)
California Senior Legislature (co-source)
San Diego County District Attorney (co-source)
AARP
Alzheimer's Association
American Federation of State, County and Municipal
Employees, AFL-CIO
Area Agency on Aging for San Luis Obispo and Santa Barbara
Counties
California Advocates for Nursing Home Reform
California Police Chiefs Association
Crime Victims Action Alliance
Los Angeles County District Attorney's Office
Older Women's League
AB 1525
Page
5
San Francisco Advisory Council to Aging and Adult Services
OPPOSITION : (Verified 8/15/12)
California Chamber of Commerce
California Grocers Association
California Retailers Association
Neighborhood Market Association
ASSEMBLY FLOOR : 46-26, 5/17/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Galgiani, Gatto, Gordon, Hall, Hayashi, Roger
Hern�ndez, Hill, Hueso, Huffman, Lara, Ma, Mendoza,
Mitchell, Monning, V. Manuel P�rez, Portantino, Solorio,
Swanson, Torres, Wieckowski, Williams, John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Donnelly, Beth
Gaines, Garrick, Gorell, Grove, Hagman, Harkey, Huber,
Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell,
Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao,
Wagner
NO VOTE RECORDED: Cook, Fletcher, Halderman, Bonnie
Lowenthal, Pan, Perea, Skinner, Yamada
JJA:d 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****