BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 586|
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THIRD READING
Bill No: SB 586
Author: Pavley (D), et al.
Amended: 5/27/11
Vote: 21
SENATE BANKING & FINANCIAL INSTIT COMM : 5-2, 04/06/11
AYES: Vargas, Evans, Kehoe, Liu, Padilla
NOES: Blakeslee, Walters
SENATE PUBLIC SAFETY COMMITTEE : 5-2, 05/03/11
AYES: Hancock, Calderon, Liu, Price, Steinberg
NOES: Anderson, Harman
SENATE APPROPRIATIONS COMMITTEE : 6-3, 05/23/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SUBJECT : Banks and credit unions: signature stamps
SOURCE : AARP
California Senior Legislature
DIGEST : This bill imposes a series of restrictions on
the issuance of signature stamps by state-chartered banks
and credit unions.
ANALYSIS : 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,
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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 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 defines 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.
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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 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 when committing a 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) 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
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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), any amount over $6,000
shall be allocated to the adult protective services agency,
or equivalent elder abuse 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, and any amount over $2,000 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).)
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This bill provides that the fine for a violation not
exceeding $950 shall be up to $2,000 (plus penalty
assessments), any amount over $1,000 shall be allocated to
the adult protective agency, or equivalent elder abuse
protection agency, of the county prosecuting the offense.
Existing law provides that any caretaker of an elder or
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 the fine for a violation not
exceeding $950 shall be up to $2,000 (plus penalty
assessments), any amount over $1,000 shall be allocated to
the adult protective agency, or equivalent elder abuse
protection agency, of the county prosecuting the offense.
This bill contains double-jointing language with AB 109
(Committee on Budget), Chapter 15, Statutes of 2011.
Prior and Related Legislation
AB 18 (Blakeslee), 2007-08 Legislative Session, would have
expressly authorized a disabled person who is unable to
write to use a signature stamp to sign a document, whenever
a signature is required by law, and would have established
certain allowable and prohibited acts in connection with
the use of signature stamps. In explaining the need for
his bill, the author stated that, while signature stamps
are currently being used in California, existing law is
silent regarding who may use these stamps, under what
conditions, and for what purposes. He asserted that this
lack of clarity results in confusion and unresolved
liability issues. AB 18 passed the Assembly, but was
narrowed in the Senate to authorize the use of signature
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stamps in instances in which the Elections Code requires a
signature. Thus, existing law remains silent regarding
who may use signature stamps, under what conditions, and
for what purposes.
SB 33 (Simitian), 2011-12 Legislative Session, would delete
the January 1, 2013 sunset date on the Elder and Dependent
Adult Financial Abuse Reporting Act. Pending in the Senate
Banking & Financial Institutions Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Admin expenses
minor, absorbable Special*
Penalty revenue
unknown increase in revenue Local
* Financial Institutions Fund
SUPPORT : (Verified 5/26/11)
AARP (co-source)
California Senior Legislature (co-source)
AFSCME
Area Agency on Aging for San Luis Obispo and Santa Barbara
Counties
California Alliance for Retired Americans
California Congress of Seniors
California School Employees Association
Congress of California Seniors
Consumer Attorneys of California
County of Ventura
County Welfare Directors Association
Disability Rights California
San Joaquin County Commission on Aging
OPPOSITION : (Verified 5/26/11)
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California Bankers Association
ARGUMENTS IN SUPPORT : AARP is co-sponsoring SB 586, a
bill it calls the Elder and Disabled Adult Abuse Prevention
Act. In its letter, AARP expresses strong support for the
bill's increase in fines for elder and dependent adult
abuse, and stresses the importance of adding the fraudulent
use of a signature stamp to harm an elder or dependent
adult to the list of crimes punishable as elder or
dependent adult abuse.
The California Senior Legislature is the bill's other
co-sponsor. Its letter of support focuses on the
provisions of the bill that would regulate the issuance and
use of a signature stamp to undertake financial
transactions.
Letters of support echoing the points made by the bill's
co-sponsors were submitted by the Congress of California
Seniors, Consumer Attorneys of California, California
School Employees Association, and AFSCME.
ARGUMENTS IN OPPOSITION : The California Bankers
Association (CBA) is opposed to the bill for several
reasons. They believe that the bill is unnecessary,
because signature stamps are not widely used today, and to
the extent they are use, the banks are aware of very few
fraud problems that customers have as a result of the
stamps. Furthermore, when fraud occurs, there are existing
remedies in law.
CBA also cites the numerous compliance challenges that the
bill would create, and express the belief that the bill may
reduce customers' ability to obtain signature stamps.
Because of the bill's requirements, many state-chartered
banks may simply stop providing them. The biggest
compliance challenge involves freezing the account of a
customer whose account is overdrawn of has accumulated
excess funds. Freezing a customer's account in these
situations could result in bounced checks or the rejection
of recurring payments or deposits. CBA also notes that the
bill's requirement to notify stamp holders if an account is
overdrawn is duplicative of existing regulations that
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mandate such behavior (Regulation DD) and that require
customers to opt in to overdraft protection (Regulation E).
Finally, CBA expresses concern that the bill would create
an unlevel playing field, as it would apply its provisions
only to state-chartered depositories, and not to their
federally-chartered competitors
JJA:nl 5/26/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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