BILL ANALYSIS �
SB 586
Page 1
SENATE THIRD READING
SB 586 (Pavley)
As Amended August 15, 2011
Majority vote
SENATE VOTE :25-14
BANKING & FINANCE 7-3 PUBLIC SAFETY 5-2
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|Ayes:|Eng, Fuentes, Gatto, |Ayes:|Ammiano, Cedillo, Hill, |
| |Roger Hern�ndez, Lara, | |Mitchell, Skinner |
| |Perea, Torres | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Harkey, Morrell |Nays:|Knight, Hagman |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Hall, Hill, Lara, | | |
| |Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
| | | | |
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SUMMARY : Restricts the issuance of signature stamps by state
chartered banks and credit unions and increases the fines
associated with certain elder abuse violations. Specifically,
this bill :
1)Defines "signature stamp" as a rubber or other synthetic stamp
or device that is used to accurately imitate the signature of
an individual.
2)Provides that a bank or credit union shall only issue a
signature stamp to an existing accountholder if either:
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a) The accountholder is present to request the stamp and an
employee of the bank or credit union witnesses and
acknowledges in writing that the signature stamp was
requested by the stamp holder; or,
b) The account holder is physically unable to come into the
bank or credit union due to disability, the accountholder
provides a letter from a physician attesting to the
physical limitations and the accountholders signature has
been notarized on a form approved and issued by the bank.
3)Requires a bank or credit union that issues a signature stamp
to an account holder to inform the account holder of the risks
associated with the 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 unauthorized
transactions, or report lost or stolen signature stamps as
quickly as possible. Furthermore, provides that this shall
not be construed to limit any civil liabilities that exist
between a bank and their customer.
4)Increases the fines for various crimes committed against
dependent adults, as defined.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the Department of Financial Institutions indicates
minor, absorbable costs.
COMMENTS :
According to the author:
This bill is needed to help prevent elder and dependent
adult abuse in all of its forms. The financial and
physical abuse of elder and dependent adults is an
insidious and growing problem in California and across
the United States. 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.
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For example, as has happened in Senator Pavley's
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. This is just one example of the
myriad ways in which a signature stamp, in the wrong
hands, can be fraudulently used to rob elder and
dependent adults of their hard earned assets.
In light of the growing need to protect our aging
population, this measure is focused on providing
consumers with information and establishing basic
protections against the fraudulent use of signature
stamps which are often used for banking purposes by
individuals with physical limitations. This is 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. Additionally, this bill seeks to deter all elder
and dependent adult abuse by increasing fines
associated with these crimes. Finally, in light of the
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 wherever possible. This bill seeks to
allocate the increase in fine monies to County Adult
Protective Services agencies for prevention and
investigation.
Though it is difficult to determine exact rates of
elder and dependent abuse since it is a highly
underreported crime, the National Center on Elder Abuse
(NCEA) indicates that a large percentage of
substantiated reports of mistreatment of older adults
are 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 wherever 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.
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Baking and Finance Committee staff is unable to determine the
statistical usage of signature stamps via empirical data.
Anecdotal information reveals that few banks or credit unions
offer this service, nor do customers use them often for personal
accounts. As revealed in the Senate Banking and Financial
Institutions Committee analysis, "Disability Rights CA estimates
that approximately 30,000 disabled persons in California (1% of
the disabled population) possess signature stamps."
Most often, signature stamps are used by business account
holders.
This bill seeks to regulate the use of these stamps by ensuring
that a bank employee witnesses and acknowledges in writing that
the stamp was requested by the physically present account
holder. If the account holder cannot be present, then they
would need to provide the institutions with a physician signed
letter attesting to any physical limitations and that the
account holder's signature is notarized. Furthermore, if an
institution issues a signature stamp they must also inform the
account holder of the risk associated with the loss, theft, or
misuse of the stamp.
This bill also increases the monetary penalties for various
crimes against elders or dependent adults.
Signature stamps can be acquired from numerous sources other
than financial institutions. This bill would not address the
interaction between a customer and a financial institutions if
the customer used a signature stamp acquired from somewhere
other than the bank or credit union. Additionally, the
requirements on banks and credit unions do not address the
actual usage of the stamp, only its issuance.
Finally, the restrictions on the issuance of these signature
stamps would only apply to California chartered banks and credit
unions, meaning that customers banking with national banks
(Wells Fargo, Bank of America, Chase, etc.) would not have the
same protections.
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081
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FN: 0001759