SB0189

SENATE BILL 189

55th legislature - STATE OF NEW MEXICO - first session, 2021

INTRODUCED BY

Katy Duhigg

AN ACT

RELATING TO FINANCIAL EXPLOITATION; ENACTING THE FINANCIAL EXPLOITATION ACT; CREATING REPORTING REQUIREMENTS; PROVIDING FOR THE DELAY OF SUSPECT TRANSACTIONS; DESCRIBING TRAINING REQUIREMENTS FOR FINANCIAL INSTITUTIONS; CREATING A CIVIL CAUSE OF ACTION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 14-2-1 NMSA 1978 (being Laws 1947, Chapter 130, Section 1, as amended) is amended to read:

"14-2-1. RIGHT TO INSPECT PUBLIC RECORDS--EXCEPTIONS.--Every person has a right to inspect public records of this state except:

A. records pertaining to physical or mental examinations and medical treatment of persons confined to an institution;

B. letters of reference concerning employment, licensing or permits;

C. letters or memoranda that are matters of opinion in personnel files or students' cumulative files;

D. portions of law enforcement records that reveal:

(1) confidential sources, methods or information; or

(2) before charges are filed, names, [address] addresses, contact information or protected personal identifier information [as defined in this Act] of individuals who are:

(a) accused but not charged with a crime; or

(b) victims of or non-law-enforcement witnesses to an alleged crime of: 1) assault with intent to commit a violent felony pursuant to Section 30-3-3 NMSA 1978 when the violent felony is criminal sexual penetration; 2) assault against a household member with intent to commit a violent felony pursuant to Section 30-3-14 NMSA 1978 when the violent felony is criminal sexual penetration; 3) stalking pursuant to Section 30-3A-3 NMSA 1978; 4) aggravated stalking pursuant to Section 30-3A-3.1 NMSA 1978; 5) criminal sexual penetration pursuant to Section 30-9-11 NMSA 1978; or 6) criminal sexual contact pursuant to Section 30-9-12 NMSA 1978. Law enforcement records include evidence in any form received or compiled in connection with a criminal investigation or prosecution by a law enforcement or prosecuting agency, including inactive matters or closed investigations to the extent that they contain the information listed in this subsection; provided that the presence of such information on a law enforcement record does not exempt the record from inspection;

E. as provided by the Confidential Materials Act;

F. trade secrets, attorney-client privileged information and long-range or strategic business plans of public hospitals discussed in a properly closed meeting;

G. tactical response plans or procedures prepared for or by the state or a political subdivision of the state, the publication of which could reveal specific vulnerabilities, risk assessments or tactical emergency security procedures that could be used to facilitate the planning or execution of a terrorist attack; [and]

H. as provided by the Financial Exploitation Act; and

[H.] I. as otherwise provided by law."

SECTION 2. [NEW MATERIAL] SHORT TITLE.--Sections 2 through 10 of this act may be cited as the "Financial Exploitation Act".

SECTION 3. [NEW MATERIAL] DEFINITIONS.--As used in the Financial Exploitation Act:

A. "caregiver" means a person who has been entrusted with or who has assumed responsibility for the care of an eligible adult or the eligible adult's property and may include a family member that is related to the eligible adult by blood or marriage; a court-appointed guardian or conservator; an adult living in the same household as the eligible adult; a health care provider; or an employee or volunteer of an adult daycare, assisted living or residential care facility, group home, nursing home, hospital, mental health treatment center or continuing care community or a service provider of such entity;

B. "confidential relationship" means a relationship of confidence and trust between an eligible adult and another person, including but not limited to a family member; business associate or partner; financial advisor; caregiver; health care or mental health care provider; legal professional; or clergy member, imam, minister, priest, rabbi or similar religious or spiritual advisor;

C. "eligible adult" means a person eighteen years of age or older with cognitive impairment or a mental, physical or developmental condition or a person who is experiencing other circumstances that cause the person to be susceptible to undue influence or substantially impaired in the ability to provide adequately for the person's personal or financial affairs or protection, regardless of whether the person has been adjudicated pursuant to Section 45-5-303 NMSA 1978;

D. "fiduciary relationship" means an agreement or arrangement that creates fiduciary duties owed from one person to another and includes the relationship between a principal and an attorney-in-fact pursuant to a power of attorney; a conservator and a protected person; a trustee and a beneficiary; a financial advisor or broker and an account owner; or a representative payee and a beneficiary;

E. "financial exploitation" means:

(1) the wrongful or unauthorized taking, conversion, withholding, appropriation or use of an eligible adult's assets, including money or other property; or

(2) an act or omission taken by a trusted person to obtain the benefit, control or use of an eligible adult's assets, including money or other property, through the use of deception, intimidation or undue influence;

F. "financial institution" means an organization authorized to do business pursuant to state or federal laws relating to financial entities and includes a bank, trust company, savings bank, building and loan association, savings and loan company or credit union;

G. "qualified individual" means a person designated by a financial institution to conduct a review of suspected financial exploitation, report suspected financial exploitation or delay transactions and receive training pursuant to the provisions of the Financial Exploitation Act;

H. "transaction" means an agreement; contract; conveyance; deed; encumbrance; gift; guarantee; loan; mortgage; pledge; purchase; sale; title transfer; transfer of money, security or other financial asset or real or personal property; or withdrawal from a financial, investment or securities account or changes to ownership on such account, but excludes wills, trusts or transfer on death designations or instruments of a similar type;

I. "trusted person" means:

(1) a caregiver, health care or mental health care provider;

(2) a person upon whom an eligible adult is dependent and with whom the eligible adult has a confidential or fiduciary relationship; or

(3) a person in a position of authority, including an eligible adult's family member, financial advisor, legal professional, clergy member, imam, minister, priest, rabbi or similar religious or spiritual advisor; and

J. "undue influence" means excessive persuasion or domination of the decision-making process of an eligible adult by a trusted person that causes an eligible adult to consent to a transaction or refrain from consenting to a transaction that would reasonably be expected to result in financial harm to the eligible adult, including controlling the eligible adult's interaction with others, access to information or necessaries of life; using affection, intimidation or coercion; or initiating changes in the eligible adult's personal or property rights in haste, secrecy or at inappropriate times and places. The fact that an eligible adult had independent legal counsel with respect to the transaction is evidence that the transaction was not the product of financial exploitation, but shall not be dispositive on whether the issue of financial exploitation occurred.

SECTION 4. [NEW MATERIAL] REPORTING FINANCIAL EXPLOITATION.--

A. When a qualified individual reasonably believes that financial exploitation of an eligible adult may have occurred, may have been attempted or is being attempted, a qualified individual:

(1) shall promptly notify the financial institutions division of the regulation and licensing department and the adult protective services division of the aging and long-term services department;

(2) shall attempt to notify a third party previously designated by the eligible adult; and

(3) may attempt to notify a third party that is not designated but is known by the qualified individual to be reasonably associated with an eligible adult.

B. A qualified individual shall not disclose information to a third party who is suspected of financial exploitation or other abuse of the eligible adult.

SECTION 5. [NEW MATERIAL] IMMUNITY FOR REPORTING FINANCIAL EXPLOITATION.--A qualified individual who exercises reasonable care on behalf of a financial institution and complies with the provisions of Sections 4 and 8 of this 2021 act shall be immune from liability that might otherwise arise from such disclosure, as shall the financial institution.

SECTION 6. [NEW MATERIAL] DELAY OF SUSPECT TRANSACTIONS.--

A. A financial institution may delay a disbursement or transaction from an account of an eligible adult or an account for which the eligible adult is a beneficiary if:

(1) after initiating an internal review of the requested disbursement or transaction, a qualified individual reasonably believes that the requested disbursement or transaction may result in financial exploitation of the eligible adult; and

(2) the financial institution:

(a) provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account no later than two business days after the requested disbursement or transaction, unless any such party is reasonably believed to have attempted the financial exploitation of the eligible adult;

(b) notifies the financial institutions division of the regulation and licensing department and the adult protective services division of the aging and long-term services department no later than two business days after the requested disbursement or transaction; and

(c) at the request of the financial institutions division of the regulation and licensing department, provides a status report of the internal review required pursuant to Paragraph (1) of Subsection A of this section.

B. Any delay of a disbursement or transaction as authorized pursuant to this section shall expire upon the sooner of:

(1) a written determination by the financial institutions division of the regulation and licensing department that the disbursement or transaction will not result in financial exploitation of the eligible adult; or

(2) fifteen business days from the date that the financial institution first delayed the disbursement or transaction unless either the financial institutions division of the regulation and licensing department or the adult protective services division of the aging and long-term services department makes a written request that the financial institution extend the delay, in which case the delay shall expire twenty-five days from the date that the financial institution first delayed the disbursement or transaction, unless otherwise terminated or extended by either of the divisions or by a court order.

C. A court may enter an order extending the delay of the disbursement or transaction or may order other protective relief based on a petition of the director of the financial institutions division of the regulation and licensing department, the director of the adult protective services division of the aging and long-term services department, the financial institution that instituted the delay pursuant to this section or any other interested party.

SECTION 7. [NEW MATERIAL] IMMUNITY FOR DELAY IN SUSPECT TRANSACTIONS.--A financial institution or qualified individual that exercises reasonable care and is in compliance with Sections 6 and 8 of this 2021 act, shall be immune from administrative and civil liability that might otherwise arise from such delay in a disbursement or transaction pursuant to Section 6 of this 2021 act.

SECTION 8. [NEW MATERIAL] TRAINING TO IDENTIFY FINANCIAL EXPLOITATION.--

A. The director of the financial institutions division of the regulation and licensing department shall promulgate rules pertaining to training guidelines and standardized training curriculum guidelines that financial institutions may use to train qualified individuals to review, delay and report transactions that are identified to have potentially resulted from financial exploitation. A financial institution may develop its own training as approved by the director of the division. The training required pursuant to this section shall include a description of indicators of financial exploitation of an eligible adult and the process for reporting suspected financial exploitation internally and to the division and the adult protective services division of the aging and long-term services department.

B. A financial institution shall provide training regarding the financial exploitation of eligible adults to qualified individuals designated by a financial institution pursuant to Section 3 of the Financial Exploitation Act.

SECTION 9. [NEW MATERIAL] DISCLOSURE OF INFORMATION.--A financial institution shall provide access to records or copies of records that pertain to the suspected or attempted financial exploitation of an eligible adult to the financial institutions division of the regulation and licensing department and the adult protective services division of the aging and long-term services department as part of a referral to the divisions and to law enforcement in the course of an investigation. Relevant records may include historical records or records relating to recent transactions that may serve as evidence of financial exploitation of an eligible adult. A record made available pursuant to this section shall not be considered a "public record" as defined in Subsection G of Section 14-2-6 NMSA 1978. Nothing in this section shall be construed to otherwise impede the authority of the director of the securities division of the regulation and licensing department to access or examine the records of brokers and investment advisors as otherwise provided by law.

SECTION 10. [NEW MATERIAL] CIVIL REMEDIES.--

A. An eligible adult or an attorney-in-fact, conservator, temporary conservator or trustee acting for or on behalf of an eligible adult may commence a civil action in a court of competent jurisdiction against a person suspected of financially exploiting an eligible adult in order to:

(1) return property;

(2) stop or enjoin a transaction;

(3) return any profit received from a transaction;

(4) seek compensatory damages for a transaction; or

(5) void or rescind a transaction.

B. To prevail on a claim made pursuant to this section, the plaintiff shall prove by a preponderance of the evidence that financial exploitation occurred.

C. Punitive damages shall be awarded when a plaintiff proves that the defendant committed financial exploitation and:

(1) acted with knowledge that the transaction was wrongful;

(2) made a transaction in indifference or reckless disregard for the financial interests of the eligible adult that resulted in financial harm to the eligible adult; and

(3) failed to cure the alleged financial exploitation within fifteen days of receiving notice of intent to seek relief from the plaintiff.

D. If a plaintiff prevails against a defendant on a financial exploitation claim, the plaintiff shall recover reasonable attorney fees and any costs incurred while pursuing such relief.

E. A remedy obtained pursuant to this section shall not limit in any way the right, title and interest of a good faith purchaser, mortgagee, holder of a security interest or other third party who obtains an interest in property transferred from an eligible adult.

F. Relief obtained pursuant to this section shall not affect the value of a mortgage.

G. Nothing in this section shall limit any other cause of action under the laws of this state.

H. When a plaintiff dies during the course of a civil proceeding initiated pursuant to this section, the personal representative of the plaintiff's estate may continue with the proceeding; provided that no proceeding made pursuant to this section shall be initiated after the plaintiff's death.

I. A person who is found to have committed financial exploitation is liable for payment of the following to the eligible adult:

(1) the amount of restitution required to restore the value of the property that the eligible adult would have had if the financial exploitation had not occurred; and

(2) any profit the defendant received through the financial exploitation.

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