BILL ANALYSIS �
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2011-2012 Regular Session B
5
8
SB 586 (Pavley) 6
As Amended April 25, 2011
Hearing date: May 3, 2011
Financial Code:Penal Code
MK:dl
BANKS AND CREDIT UNIONS:
SIGNATURE STAMPS
HISTORY
Source: AARP
Prior Legislation: None
Support: Disability Rights California; Alzheimer's Association;
Ventura County Board of Supervisors; California
Alliance for Retired Americans; San Joaquin County
Commission on Aging; The California Senior Legislature;
Congress of California Seniors; The AFSCME, AFL-CIO;
The California School Employees Association; AFL-CIO;
Consumer Attorneys of California; The County Welfare
Directors Association
Opposition:California Bankers Association
KEY ISSUES
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SHOULD THE FINES FOR SPECIFIED ELDER ABUSE VIOLATIONS BE
DOUBLED?
SHOULD 50% OF THE FINES FOR SPECIFIED ELDER ABUSE VIOLATION GO
TO THE ADULT PROTECTIVE SERVICES AGENCY IN THE COUNTY WHERE THE
PROSECUTION TOOK PLACE?
SHOULD "SIGNATURE STAMPS" BE REGULATED?
SHOULD USE OF A "SIGNATURE STAMP" WITHOUT KNOWLEDGE AND WRITTEN
AUTHORIZATION BE A WOBBLER?
PURPOSE
The purpose of this bill is to 1) regulate signature stamps and
make their misuse a wobbler; and 2) increase fines for specified
elder abuse violations and provide that 50% of the fine goes to
the adult protective agency.
Existing law allows a mark to be affixed as a signature for a
person who cannot write, as long as it is witnessed and signed
by the witness(es) to the mark (Civil Code Section 14, Code of
Civil Procedure Section 17, Corporations Code Section 17,
Elections Code Section 354.5, Financial Code Section 17, Fish
and Game Code Section 81, Government Code Section 16, Harbors
and Navigation Code Section 18, Labor Code Section 17, Military
and Veterans Code Section 17, Penal Code Section 7, Public
Resources Code Section 17, Public Utilities Code Section 16,
Revenue and Taxation Code Section 18, Streets and Highways Code
Section 18, Unemployment Insurance Code Section 17, Vehicle Code
Section 17, Water Code Section 17, and Welfare and Institutions
Code � 17).
Existing law provides that 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, or any elder or dependent adult care custodian,
health practitioner, clergy member, or employee of a county
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adult protective services agency or a local law enforcement
agency, is a mandated reporter. Any one of these individuals,
who observes or has knowledge of an incident that reasonably
appears to be physical abuse, abandonment, abduction,
isolation, financial abuse, or neglect, or who is told by an
elder or dependent adult that he or she has experienced behavior
constituting physical abuse, abandonment, abduction, isolation,
financial abuse or neglect, or who reasonably suspects that
abuse, must report the known or suspected instance of abuse by
telephone immediately or as soon as reasonably practicable, and
in writing within two working days, as specified (Welfare and
Institutions Code � 15630).
Existing law provides that in addition to the provision
described above, until January 1, 2013, California's Elder and
Dependent Adult Financial Abuse Reporting Act requires all
officers and employees of financial institutions to act as
mandated reporters of elder and dependent adult financial abuse,
as specified (Welfare and Institutions Code �� 15630.1, 15633,
15634, 15640, and 15655.5).
This bill would define a signature stamp as a rubber or other
synthetic stamp or device used to accurately imitate the
signature of an individual, and would require specified actions,
with respect to any state-chartered bank or state-chartered
credit union that issues a signature stamp.
This bill provides that the bank/credit union could only issue a
signature stamp to an existing account holder, if either the
accountholder is physically present to request the stamp and an
employee of the bank witnesses and acknowledges in writing that
the signature stamp was requested by the stamp holder, or an
account holder is unable to physically come into a bank due to a
disability the account holder provides a letter from a physician
attesting to the physical limitation and the accountholder's
signature is notarized on an appropriate form approved and
issued by the bank.
This bill provides that a bank/credit union that issues a
signature stamp to an account holder shall inform the account
holder of the risks associated with loss, theft, or misuse of
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the signature stamp, and his or her rights and responsibilities
as a stamp holder, including but not limited to, the
responsibility to review the account frequently, and report any
unauthorized transactions promptly, and to report a lost or
stolen signature stamp as quickly as possible, upon the
discovery that it has been lost or stolen.
This bill provides that a bank/credit union shall not honor a
request to open a new account that is received by mail from a
signature stamp holder.
This bill provides that any person who uses a signature stamp in
violation of Penal Code Section 368 is also liable for
restitution of all funds fraudulently obtained thereby.
Existing law makes it a wobbler punishable by up to one year in
county jail or a fine of up to $6,000 (plus penalty assessments
<1>) or 2, 3 or 4 years in state prison for a person who knows
or reasonably should know that a person is an elder or dependent
adult to, under circumstance or conditions likely to produce
great bodily harm or death, willfully causes or permits any
elder or dependent adult to suffer, or inflicts thereon
unjustifiable physical pain or mental suffering, or having the
care or custody of any elder or dependent adult, willfully
causes or permits the person or health of the elder or dependent
adult to be injured, or willfully causes or permits the elder or
dependent adult to be placed in a situation in which his or her
person or health is endangered. (Penal Code � 368 (b).)
This bill provides that the fine for the above shall be $12,000
(plus penalty assessments) 50% of which shall be allocated to
the adult protective services agency, or equivalent elder abuse
---------------------------
<1> Until the budget year 2002-2003, there was 170% in penalty
assessments applied to every fine, the current penalty
assessments are approximately 280%. (See Penal Code � 1464;
Penal Code � 1465.7; Penal Code � 1465.8 Government Code �
70372; Government Code � 7600.5 Government Code � 76000 et seq;
Government Code � 76104.6; Government Code � 76000.5)
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prevention agency, of the county prosecuting the offense.
Existing law makes it a misdemeanor for any person who knows or
reasonably should know that a person is an elder or dependent
adult and who, under circumstances or conditions other than
those likely to produce great bodily harm or death, willfully
causes or permits any elder or dependent adult to suffer, or
inflicts thereon unjustifiable physical pain or mental
suffering, or having the care or custody of any elder or
dependent adult to be placed in a situation in which his or her
person or health may be endangered. A second or subsequent
violation is punishable by a fine not to exceed $2,000 (plus
penalty assessments). (Penal Code � 368 (c).)
This bill provides that the fine for a second or subsequent
violation is $4,000, 50% of which shall be allocated to the
adult protective services agency, or equivalent elder abuse
prevention agency, of the county prosecuting the offense.
Existing law provides that any person who is not a caretaker who
violates any provision of law proscribing theft, embezzlement,
forgery or fraud or who violates Section 530.5 proscribing
identity theft with respect to the property or personal
identifying information of an elder or dependent adult, and who
knows or reasonably should know that the victim is an elder or
dependent adult is guilty of a wobbler punishable by up to one
year in county jail or in the state prison for 2, 3 or 4 years
when the moneys, labor, goods, services or real or personal
property taken or obtained is of a value not exceeding $950 and
by a fine not exceeding $1,000 or imprisonment in the county
jail for up to one year when the value is less than $950. (Penal
Code � 368 (d).)
This bill provides that this wobbler also applies to a person
who is not a caretaker who uses a signature stamp as defined in
this bill.
This bill provides that the fine for a violation not exceeding
$950 shall be up to $2,000 (plus penalty assessments)
Existing law provides that any caretaker of an elder or
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dependent adult who violates any provision of law proscribing
theft, embezzlement, forger, or fraud, or who violates 530.5
proscribing identity theft with respect to the property or
personal identifying information of that elder or dependent
adult, is guilty of a wobbler punishable by imprisonment in the
county jail for not more than one year or in the state prison
for 2, 3 or 4 years when the value of what was taken was more
than $950. When the value is less than $950 then it is a
misdemeanor with a fine up to $1,000 and/or one year in county
jail. (Penal Code � 368 (e).)
This bill provides that this wobbler also applies to a person
who is a caretaker who uses a signature stamp as defined in this
bill.
This bill provides that the fine for a violation not exceeding
$950 shall be up to $2,000 (plus penalty assessments.)
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation.
As these cases have progressed, prison conditions have
continued to be assailed, and the scrutiny of the federal courts
over California's prisons has intensified.
On June 30, 2005, in a class action lawsuit filed four years
earlier, the United States District Court for the Northern
District of California established a Receivership to take
control of the delivery of medical services to all California
state prisoners confined by the California Department of
Corrections and Rehabilitation ("CDCR"). In December of 2006,
plaintiffs in two federal lawsuits against CDCR sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
three-judge federal panel issued an order requiring California
to reduce its inmate population to 137.5 percent of design
capacity -- a reduction at that time of roughly 40,000 inmates
-- within two years. The court stayed implementation of its
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ruling pending the state's appeal to the U.S. Supreme Court.
On Monday, June 14, 2010, the U.S. Supreme Court agreed to hear
the state's appeal of this order and, on Tuesday, November 30,
2010, the Court heard oral arguments. A decision is expected as
early as this spring.
In response to the unresolved prison capacity crisis, in early
2007 the Senate Committee on Public Safety began holding
legislative proposals which could further exacerbate prison
overcrowding through new or expanded felony prosecutions.
This bill does appear to aggravate the prison overcrowding
crisis described above.
COMMENTS
1 Need for This Bill
According to the author:
When specific instruments of financial abuse and
schemes to defraud elder and disabled individuals come
to light, it is imperative that the Legislature act
where appropriate to establish reasonable safeguards
against this type of criminal activity. This bill
seeks to help provide basic safeguards against the
fraudulent use of signature stamps which is one such
avenue of abuse. Additionally, this bill seeks to deter
all forms of elder and dependent adult abuse by
doubling the fines associated with these crimes.
Finally, in light of the budget deficit in California
and the accompanying cuts of the last several years, it
is equally crucial that funding be maintained for those
agencies that investigate and prevent elder and
disabled abuse wherever possible. This bill seeks to
allocate the increase in fine monies to County Adult
Protective Services agencies for prevention and
investigation.
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The financial and physical abuse of elder and dependent
adults is an insidious and growing problem in
California and across the United States, and this bill
is intended to help prevent abuse in all of its forms.
Unfortunately, with the explosion of online, telephonic
and other non-traditional forms of banking and
financial activity, financial fraud and other abuse
schemes against elders and disabled individuals who
need assistance with the maintenance of their financial
concerns has become easier. For example, as has
happened in my district, a caretaker or family member
could steal or otherwise fraudulently use a rubber
signature stamp to withdraw or transfer funds from an
elder or dependent adult's bank account.
Therefore, this measure establishes safeguards against
the fraudulent use of signature stamps which are often
used for banking purposes by individuals with physical
limitations. This is only one type of fraud among
many, however it is part of an epidemic of financial
abuse that will be facing our aging and dependent adult
population in the years to come. It is difficult to
determine exact rates of elder and dependent abuse
since it is a highly underreported crime, however the
National Center on Elder Abuse (NCEA) indicates that a
large percentage of substantial reports of mistreatment
of older adults involve financial exploitation, a
percentage that is expected to grow as the baby boomer
generation grows older and our society ages in the
years and decades to come. It is therefore incumbent
upon the Legislature to act whenever possible to
establish basic safeguards, and to thwart specific
avenues of potential abuse wherever it is reasonable to
do so in a manner that is least restrictive on
individuals.
SB 586 also increases the fines for all elder abuse
crimes, including fraud, forgery, theft, embezzlement,
identity theft, or physical abuse and adds to that list
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of crimes the fraudulent use of a signature stamp. The
increase in fines will be dedicated to the Adult
Protective Services Agency in the jurisdiction where
the crime is prosecuted for the purposes of abuse
prevention and investigation. This provision is
intended to both deter all forms of abuse, as well as
increase much needed funding for prevention and
investigation activities.
2. Regulation of "Signature Stamps "
This bill sets up regulations for banks and credit unions when
issuing a signature stamp to a cardholder. A signature stamp
may only be issued in person to an existing account holder,
unless there is a note from the doctor that the person is
physically unable to come into the bank. When issuing the
signature stamp the bank or credit union must inform the account
holder of the risks associated with a signature stamp in order
for the person to safeguard against these risks.
The issue of the regulation of signature stamps was discussed in
Senate Banking and Financial Institutions which heard the bill
on April12. It passed on a 5-2 vote.
3. Expansion of Existing Wobblers
This bill adds use of a signature stamp in a financial
transaction without the knowledge and express written
authorization of the stamp holder to existing elder abuse
wobblers for fraud, theft or embezzlement either by a person who
is a caregiver or one who is not.
Because using a signature stamp without a person's knowledge to
take money from them would already be theft, embezzlement, fraud
or identity theft adding the specific use of a signature stamp
is not necessary to cover this activity. However, adding it to
the section on fraud could make behavior that is not fraudulent
subject to a felony. For example, under this bill, if the stamp
is used without the person's knowledge or with the person's
knowledge but without written authorization but not for the
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purposes of fraud, (i.e., to pay a bill for the person), the
user of the stamp would be guilty of a wobbler.
Because the addition of the signature stamp language to the
wobblers in Penal Code Section 368(d) and (e) are not necessary
to get to the fraud which is the concern of the bill and also
causes the bill to violate the Committee's ROCA policy against
new felonies, the author may wish to remove those additions from
the bill.
4. Increase in Fines
This bill doubles fines for specified crimes against elders and
dependent adults. Under existing law there are approximately
280% in penalty assessments on every fine. The increases in this
bill are as follows:
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|Penal Code |Existing |Existing |New fine |New |
|�368 |Fine |approximate | |approximate |
|subdivision | |fine once | |fine once |
| | |penalty | |penalty |
| | |assessments | |assessments |
| | |are added. | |are added. |
|------------+------------+------------+------------+------------|
|(b) |$6,000 |$22,800 |$12,000 |$45,600 |
|Physical or | | | | |
|mental | | | | |
|suffering | | | | |
|likely to | | | | |
|produce | | | | |
|great | | | | |
|bodily | | | | |
|injury on | | | | |
|elder or | | | | |
|dependent | | | | |
|adult | | | | |
|------------+------------+------------+------------+------------|
|(c) |$1,000 - |$3,800 - |$2,000 - |$7,600 - |
|Physical or |first |first |first |first |
|mental |offense |offense |offense |offense |
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|suffering | | | | |
|not likely |$2,000 - |$7,600 - |$4,000 - |$15,200 - |
|to produce |repeat |repeat |repeat |repeat |
|great |offense |offense |offense |offense |
|bodily | | | | |
|injury | | | | |
|------------+------------+------------+------------+------------|
|(d) Not a | If amount |If amount |If amount |If amount |
|caretaker |taken less |taken less |taken is |taken less |
|who commits |than |than |less than |than |
|fraud |$950-$1,000 |$950-$3,800 |$950-$2,000 |$950-$7,600 |
|------------+------------+------------+------------+------------|
|(e) A |If amount |If amount |If amount |If amount |
|caretaker |taken less |taken less |taken is |taken less |
|who commits |than |than |less than |than $950- |
|fraud |$950-$1,000 |$950-$3,800 |$950-$2,000 |$7,600 |
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Are the increases in these fines appropriate? At what point do
high fines impact how much restitution a person must or can pay?
Especially in situations involving fraud, is it more important
to make sure the offender can pay as much restitution back to
the person or the estate of the person who was defrauded or that
the person should pay a high fine to the courts?
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5. Distribution of Fines
This bill provides that 50% of the fines collected shall be
allocated to the adult protective services agency or equivalent
elder abuse prevention agency, of the county prosecuting the
offense. Generally, fines are distributed between the counties
and the jurisdiction of the arresting agency. This would
require the county to figure out what portions of the fines they
receive are pursuant to this section and then distribute 50% of
that amount accordingly. If the author and sponsor believe that
some of the funds should go directly to the agencies another
approach has been to add an additional fine that the court may
impose for these purposes instead of increasing the existing
base fine. (See for example Penal Code � 266k) The approach of
an additional fine that may be imposed for these purposes also
allows the court to make a clearer determination as to whether
the additional fine shall be imposed or whether, due to the
defendant's limited funds, it is a circumstance where additional
restitution shall be ordered to pay back the victim.
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