[House Report 114-659]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-659
======================================================================
SENIOR$AFE ACT OF 2016
_______
July 5, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 4538]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 4538) to provide immunity from suit for certain
individuals who disclose potential examples of financial
exploitation of senior citizens, and for other purposes, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Senior$afe Act of 2016''.
SEC. 2. IMMUNITY.
(a) Definitions.--In this Act--
(1) the term ``Bank Secrecy Act Officer'' means an individual
responsible for ensuring compliance with the requirements
mandated by subchapter II of chapter 53 of title 31, United
States Code;
(2) the term ``broker-dealer'' means a broker or dealer, as
those terms are defined, respectively, in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
(3) the term ``covered agency'' means--
(A) a State financial regulatory agency, including a
State securities or law enforcement authority;
(B) each of the Federal financial institutions
regulatory agencies;
(C) the Securities and Exchange Commission;
(D) a law enforcement agency; and
(E) and State or local agency responsible for
administering adult protective service laws;
(4) the term ``covered financial institution'' means--
(A) a credit union;
(B) a depository institution;
(C) an investment advisor;
(D) a broker-dealer; and
(E) an insurance company;
(5) the term ``credit union'' has the meaning given that term
in section 2 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5301);
(6) the term ``depository institution'' has the meaning given
the term in section 3(a) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(a));
(7) the term ``exploitation'' means the fraudulent or
otherwise illegal, unauthorized, or improper act or process of
an individual, including a caregiver or fiduciary, that--
(A) uses the resources of a senior citizen for
monetary personal benefit, profit, or gain; or
(B) results in depriving a senior citizen of rightful
access to or use of benefits, resources, belongings or
assets;
(8) the term ``Federal financial institutions regulatory
agencies'' has the meaning given the term in section 1003 of
the Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3302);
(9) the term ``investment adviser'' has the meaning given the
term in section 202 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-2);
(10) the term ``insurance company'' has the meaning given the
term in section 2(a) of the Investment Company Act of 1940 (15
U.S.C. 80a-2(a));
(11) the term ``registered representative'' means an
individual who represents a broker-dealer in effecting or
attempting to affect a purchase or sale of securities;
(12) the term ``senior citizen'' means an individual who is
not less than 65 years of age; and
(13) the term ``State securities or law enforcement
authority'' has the meaning given the term in section 24(f)(4)
of the Securities Exchange Act of 1934 (15 U.S.C. 78x(f)(4)).
(b) Immunity From Suit.--
(1) Immunity for individuals.--An individual who has received
the training described in section 3 shall not be liable,
including in any civil or administrative proceeding, for
disclosing the possible exploitation of a senior citizen to a
covered agency if the individual, at the time of the
disclosure--
(A) served as a supervisor, compliance officer
(including a Bank Secrecy Act Officer), or registered
representative for a covered financial institution; and
(B) made the disclosure with reasonable care
including reasonable efforts to avoid disclosure other
than to a covered agency.
(2) Immunity for covered financial institutions.--A covered
financial institution shall not be liable, including in any
civil or administrative proceeding, for a disclosure made by an
individual described in paragraph (1) if--
(A) the individual was employed by, or, in the case
of a registered representative, affiliated or
associated with, the covered financial institution at
the time of the disclosure; and
(B) before the time of the disclosure, the covered
financial institution provided the training described
in section 3 to each individual described in section
3(a).
SEC. 3. TRAINING REQUIRED.
(a) In General.--A covered financial institution may provide training
described in subsection (b)(1) to each officer or employee of, or
registered representative affiliated or associated with, the covered
financial institution who--
(1) is described in section 2(b)(1)(A);
(2) may come into contact with a senior citizen as a regular
part of the duties of the officer, employee, or registered
representative; or
(3) may review or approve the financial documents, records,
or transactions of a senior citizen in connection with
providing financial services to a senior citizen.
(b) Training.--
(1) In general.--The training described in this paragraph
shall--
(A) instruct any individual attending the training on
how to identify and report the suspected exploitation
of a senior citizen;
(B) discuss the need to protect the privacy and
respect the integrity of each individual customer of a
covered financial institution; and
(C) be appropriate to the job responsibilities of the
individual attending the training.
(2) Timing.--The training required under subsection (a) shall
be provided as soon as reasonably practicable but not later
than 1 year after the date on which an officer, employee, or
registered representative begins employment with or becomes
affiliated or associated with the covered financial
institution.
(3) Bank secrecy act officer.--An individual who is
designated as a compliance officer under an anti-money
laundering program established pursuant to section 5318(h) of
title 31, United States Code, shall be deemed to have received
the training described under this subsection.
SEC. 4. RELATIONSHIP TO STATE LAW.
Nothing in this Act shall be construed to preempt or limit any
provision of State law, except only to the extent that section 2
provides a greater level of protection against liability to an
individual described in section 2(b)(1) or to a covered financial
institution described in section 2(b)(2) than is provided under State
law.
PURPOSE AND SUMMARY
Representatives Kyrsten Sinema, Bruce Poliquin, Patrick
Murphy and Mick Mulvaney introduced H.R. 4538, the Senior$afe
Act of 2016, on February 11, 2016. The Senior$afe Act provides
that certain financial institutions will receive immunity from
civil or administrative proceedings if the financial
institution provides training to supervisory, compliance or
legal employees to identify and report the suspected
exploitation of a senior citizen to specified law enforcement
or regulatory authorities.
BACKGROUND AND NEED FOR LEGISLATION
According to a study conducted by MetLife, seniors lose at
least $2.9 billion annually in reported cases of financial
exploitation. It has been estimated that one in five seniors,
age 65 and older, have been the victim of financial fraud.
However, despite the prevalence of senior financial fraud, the
National Adult Protective Services Association estimated that
only one in 44 cases of financial abuse is ever reported.
H.R. 4358 enables financial institutions and their
employees to communicate with the appropriate regulatory and
law enforcement agencies when there is a suspicion of financial
exploitation of their clients. The Senior$afe Act also
encourages, but does not require, financial institutions to
offer employees training regarding the reporting of fraud
against seniors; institutions offering such training may seek
to avail themselves of the safe harbor from liability provided
by the Act.
Seniors can be susceptible to financial fraud because
current bank privacy laws make it difficult for these entities
to report any potentially fraudulent activity. H.R. 4538 would
protect banks, credit unions, investment advisers, broker-
dealers, and insurance companies--and their employees--from
civil or administrative liability, as long as employees receive
training in how to spot and report predatory activity and
reports are made ``in good faith'' and ``with reasonable
care.''
H.R. 4538 is based on the state of Maine's Senior$afe
program, an initiative launched in 2014 that was designed to
train financial professionals to detect and report senior
financial abuse. Senators Susan Collins and Claire McCaskill
introduced similar legislation in October of 2015, S. 2216,
``Senior$afe Act of 2015.''
HEARINGS
The Committee on Financial Services' held no hearings
examining matters relating to H.R. 4538.
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
June 15 and June 16, 2016. An amendment in the nature of a
substitute offered by Ms. Sinema was agreed to by voice vote.
The Committee ordered H.R. 4538 to be reported favorably to the
House as amended by a recorded vote of 59 yeas to 0 nays
(recorded vote no. FC-108), a quorum being present.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole record vote in committee was a motion by Chairman
Hensarling to report the bill favorably to the House as
amended. That motion was agreed to by a recorded vote of 59
yeas to 0 nays (Record vote no. FC-108), a quorum being
present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 4538
will reduce financial fraud against seniors by providing that
certain employees of a covered financial institution that
receive training, and financial institutions that provide
training regarding the identification and reporting of the
suspected exploitation of a senior citizen, would not be liable
for disclosing such exploitation to a covered agency, provided
that the individual made the disclosure in good faith and with
reasonable care.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATES
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 1, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4538, the
Senior$afe Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sarah Puro.
Sincerely,
Keith Hall.
Enclosure.
H.R. 4538--Senior$afe Act of 2016
H.R. 4538 would exempt financial institutions and some of
their employees from liability in any civil or administrative
proceeding when those employees report to a government agency
about the potential exploitation of a senior citizen. Based on
information from the federal banking regulators, CBO concludes
that the bill would not change their policies towards such
reporting. Accordingly, CBO estimates that enacting the bill
would have no effect on the federal budget.
Enacting the bill would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting H.R. 4538 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2027.
H.R. 4538 would impose an intergovernmental mandate as
defined in the Unfunded Mandate Reform Act (UMRA) by preempting
state laws that provide a lower level of liability protection
for certain financial institutions and their employees than
would be provided under the bill. The bill would exempt from
liability financial institutions and employees of those
institutions that have received training on the financial
exploitation of senior citizens and have filed reports of such
exploitation to an appropriate government authority. Although
the preemption would limit the application of state laws and
regulations, CBO estimates that the bill would impose no duty
on state, local, or tribal governments that would result in
additional spending or a loss of revenues.
H.R. 4538 also would impose a private-sector mandate by
removing a private right of action. The bill would eliminate
the right of plaintiffs to file a civil action against certain
financial institutions and their employees. The cost of the
mandate would be the forgone net value of awards and
settlements that would have been awarded for such claims in the
absence of the bill. A search of the available literature
suggests that few of those specific types of lawsuits have been
brought under current law.
Although there is uncertainty about the number of claims
against financial institutions and their employees that would
be successful and about the value of awards or settlements in
those cases, because of the narrow scope of the cases involved,
CBO expects that the cost of the mandate in any one year would
fall below the annual threshold for private-sector mandates
established in UMRA ($154 million in 2016, adjusted annually
for inflation).
The CBO staff contacts for this estimate are Sarah Puro
(for federal costs), Rachel Austin (for intergovernmental
mandates) and Logan Smith (for private-sector mandates). The
estimate was approved by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates reform
Act.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
EARMARK IDENTIFICATION
H.R. 4538 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee states that no provision of H.R. 4538 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
DISCLOSURE OF DIRECTED RULEMAKING
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee states that H.R. 4538 contains no directed
rulemaking.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1: Short title
This section cites H.R. 4538 as the ``Senior$afe act of
2016.''
Section 2: Immunity
This section sets forth definitions including that of a
covered financial institution, which means: (a) a bank; (b) a
credit union; (c) an investment adviser; (d) a broker-dealer;
and (e) an insurance company.
This section sets forth that individuals who receive
training are not liable for any civil or administrative
proceeding if they disclose the exploitation of a senior
citizen to a covered agency with reasonable care. In addition,
covered financial institutions that provide training to
employees are not liable for any civil or administrative
proceeding arising from the individual's disclosure.
Section 3: Training required
This section outlines the training that is required for
employees or financial institutions that interact with senior
citizens. The training shall instruct individuals how to
identify suspected exploitation of a senior citizen, shall
instruct individuals how to respect the privacy of customers,
and shall be appropriate to the individual in the training. The
training shall be provided no later than 1 year after
employment.
Section 4: Relationship to State law
This section states that this bill shall not preempt State
law except to the extent that the Senior$afe Act provides a
greater level of liability protection than is currently
provided for in state law.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 4538 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report contemplated by Clause 3(e)(1)(B) of rule
XIII of the House of Representatives.
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