BILL ANALYSIS �
AB 586
Page 1
Date of Hearing: July 5, 2011
Counsel: Sandy Uribe
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Tom Ammiano, Chair
SB 586 (Pavley) - As Amended: June 29, 2011
REVISED
SUMMARY : Establishes a framework in the Financial Code for the
prevention of fraudulent signature stamp use, and increases
fines for specified crime against elder and dependent adults.
Specifically, this bill :
1)Defines a "signature stamp" as a rubber or other synthetic
stamp or device used to accurately imitate the signature of an
individual.
2)Limits issuance of a signature stamp by a bank or credit union
to an existing account holder who:
a) Is physically present, and when an employee of the
financial institution witnesses and acknowledges in writing
that the signature stamp was requested by the holder; or,
b) An account holder is unable to physically come to the
financial institution due to disability, and the account
holder provides a letter from a physician attesting to the
physical limitation, and the holder's signature is
notarized on an appropriate form approved and issued by the
financial institution.
3)Prohibits a bank or credit union from honoring a request to
open a new account received by mail from a signature stamp
holder.
4)Requires a bank or credit union to inform the account holder
of the risks associated with signature stamps.
5)Limits application of these provisions to personal accounts,
including trust accounts, of a natural person, and specifies
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they shall not apply to a natural person acting in the
capacity of a representative or an agent of an entity that is
not a natural person.
6)Provides that any person who uses a signature stamp when
committing a violation of theft against an elder is also
liable for restitution of all funds fraudulently obtained
thereby, including the monetary value of any goods or services
so obtained.
7)Increases fines for financial abuse of an elder or dependent
adult, whether or not committed by a caretaker, from a maximum
of $1,000 to a maximum of $2,000, when the value of the losses
from the crime do not exceed $950, and provides that any
amount over $1,000 shall be allocated to the adult protective
services agency, or equivalent elder abuse prevention agency,
of the county prosecuting the offense.
8)Increases the fine for subsequent misdemeanor convictions of
abuse against an elder or dependent adult from a maximum fine
of $2,000 to a maximum of $4,000, and provides that 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.
9)Increases the fine for a conviction of willfully causing or
permitting an elder or dependent adult to suffer under
circumstances or conditions likely to produce great bodily
harm or death, from a maximum fine of $6,000 to a maximum of
$12,000, and provides that 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 :
1)Provides that any person who knows or reasonably should know
that a person is an elder or dependent adult and who, under
circumstances 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, is punishable by
imprisonment in a county jail not exceeding one year, or by a
fine not to exceed $6,000, or by both that fine and
imprisonment, or by imprisonment in the state prison for two,
three, or four years. �Penal Code Section 368(b).]
2)Provides that any person who knows or reasonably should know
that a person is an elder or dependent adult and who, under
circumstances or conditions not 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 may be endangered, is guilty of a
misdemeanor. A second or subsequent violation of this
subdivision is punishable by a fine not to exceed $2,000, or
by imprisonment in a county jail not to exceed one year, or by
both that fine and imprisonment. �Penal Code Section 368(c).]
3)Establishes fines and other punishment for theft,
embezzlement, forgery, or fraud, and identity theft and
identity crimes against elders or dependent adults, as follows
�Penal Code Section 368(d) and (e)]:
a) A person who is not a caretaker, and who knows or
reasonably should know that the victim is an elder or a
dependent adult, and the value of the labor, goods,
services, funds, or real and/or personal property taken
does not exceed $950 may be punished by a fine not
exceeding $1,000 and/or by imprisonment in a county jail
not exceeding one year.
b) A person who is not a caretaker, and who knows or
reasonably should know that the victim is an elder or a
dependent adult, and the value of the labor, goods,
services, funds, or real and/or personal property taken
exceeds $950 may be punished by up to one year in a county
jail or 2, 3 or 4 years in state prison.
c) A person who is a caretaker, and the value of the labor,
goods, services, funds, or real and/or personal property
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taken does not exceed $950 may be punished by a fine not
exceeding $1,000 and/or by imprisonment in a county jail
not exceeding one year.
d) A person who is a caretaker, and the value of the labor,
goods, services, funds, or real and/or personal property
taken exceeds $950 may be punished by up to one year in a
county jail or 2, 3 or 4 years in state prison.
4)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 Section 17.)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement : 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 consumer protections 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.
"The financial and physical abuse of elder and dependent adults
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is an insidious and growing problem in California and across
the United States, and this bill is intended to help prevent
such 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.
"Accordingly, 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 substantiated 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 of the utmost importance for the Legislature to
establish basic safeguards against such abuse wherever it is
reasonable to do so in a manner that is least restrictive on
individuals."
2)Penalties and Assessments : As counties and local governments
have less and less revenue due to budget constraints, more and
more of the cost of prosecuting criminal offenses is being
passed on to the defendants. Under existing law, there are
approximately 280% in penalty assessments on every fine. The
base fines for criminal offenses are subject to the following
assessments: a $50 state penalty under Penal Code Section
1464(a)(1); a $35 county penalty under Government Code Section
76000(a)(1); a $10 state surcharge under Penal Code Section
1465.7(a); a $25 Government Code Section 70372(a)(1) state
court-construction penalty; a $10 Government Code Section
76000.5(a)(1) emergency-medical-services penalty; a $5
Government Code Section 76104.6(a)(1) deoxyribonucleic-acid
penalty; and a $5 Government Code Section 76104.7(a)
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state-only, deoxyribonucleic-acid penalty. �See e.g. People
v. Knightbent (2010) 186 Cal.App.4th 1105, 1109.]
Thus, the amount of the fine plus its penalty assessments is
significant. These assessments are in addition to any
restitution ordered or any other fees required, such as the
separate and additional restitution fine required by Penal
Code Section 1202.4, and a possible probation-revocation
restitution fine under Penal Code Section 1202.44, or a
parole-revocation restitution fine under Penal Code Section
1202.45. Criminal defendants are incurring huge liabilities
as a result of fees, fines, penalty assessments, and
restitution orders.
3)Argument in Support : According to the Congress of California
Seniors , "Unfortunately, financial fraud and other abuse
schemes against elders and disabled individuals who need
assistance with the maintenance of their financial concerns
has become easier due to new technologies. Therefore, it is
incumbent on the Legislature to act wherever possible to
thwart specific methods of abuse.
"Additionally, in light of the massive structural budget deficit
in California and the accompanying budget 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."
4)Argument in Opposition : According to the California Bankers
Association , "�The bill] establishes compliance challenges
that do not result in a net benefit to a bank or its
customers. Signature stamps are provided as a courtesy to a
limited number of customers and this bill may result in
decreasing the number of banks that use them.
"The use of a signature stamp is already a difficult process for
banks to monitor and becomes even more complicated in a world
of increasing electronic transactions. Signature stamps are
completely indistinguishable from facsimile signatures and can
be a compliance problem when using remote deposit capture
(RDC), which is the ability to deposit a check into a bank
account from one's home or office without having to physically
deliver the actual check to the bank. An RDC is typically
accomplished by scanning the digital image of a check into a
computer and transmitting that image to the bank. If a bank
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cannot determine the difference between a signature stamp and
a facsimile signature, the bank may have additional burdens on
monitoring the account.
"In addition, the bill applies only to state-chartered banks,
which establishes an unleveled playing field for
state-chartered community banks."
5)Related Legislation :
a) AB 332 (Butler), of the 2011-12 Legislative Session,
increases the fines for and theft, embezzlement, forgery,
fraud and identity theft against an elder or dependent
adult. AB 332 is pending a vote on the Senate Floor.
b) AB 1293 (Blumenfield), of the 2011-12 Legislative
Session, authorizes a prosecuting agency to file a petition
of forfeiture in criminal proceedings that allege theft or
embezzlement of property worth $100,000 or more from an
elder or dependent adult. AB 1293 is pending hearing by
the Senate Committee on Public Safety.
REGISTERED SUPPORT / OPPOSITION :
Support
AARP
American Federation of State County and Municipal Employees
Alzheimer's Association
Area Agency on Aging for San Luis Obispo and Santa Barbara
Counties Advisory Council
California Alliance for Retired Americans
California School Employees Association
California Senior Legislature
City and County of San Francisco, Department of Aging and Adult
Service
Congress of California Seniors
Consumer Attorneys of California
County Welfare Directors Association of California
Disability Rights California
Los Angeles County Board of Supervisors
San Joaquin County Commission on Aging
Ventura County Board of Supervisors
Opposition
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California Bankers Association
California Independent Bankers
Analysis Prepared by : Sandy Uribe / PUB. S. / (916) 319-3744