2020 Regular Session: Week 2 Recap

The second week of the session saw the introduction of the centerpiece of the Alabama Bankers Association’s 2020 legislative agenda: The Elderly and Vulnerable Adult Financial Exploitation Prevention Act.

Sponsored in the House by Financial Services Committee Chairman Rep. Chris Blackshear (R-Phenix City) and in the Senate by Banking and Insurance Committee Chairman Sen. Shay Shelnutt (R-Trussville), the bills, House Bill 207 and Senate Bill 166, provide financial service providers with additional tools to address the rise of financial exploitation among elderly and vulnerable adults. Below is a quick three-point summary of the bill:

  1. Investigation
    1. Gives financial service providers the ability to refuse or delay transactions on accounts of elderly or vulnerable adult customers when there is a reasonable belief that financial exploitation has occurred or is being attempted
    2. Requires financial service providers to notify (i) the accountholder, if a transaction has been refused or delayed, and (ii) the DHR and the appropriate law enforcement agency, if financial exploitation has occurred
  2. Intervention
    1. Allows an elderly or vulnerable customer to provide a list of persons for the financial service provider to contact when there is a reasonable belief that financial exploitation has occurred or is being attempted
    2. Gives financial service providers ability to convey suspicion of exploitation to anyone (i) listed by the customer, (ii) listed on the account, and (iii) reasonably associated with the accountholder, such as an attorney or an accountant
  3. Immunity
    1. Makes clear that a financial service provider never has to contact someone who is a suspected perpetrator of the financial exploitation, even if that person is otherwise eligible to be contacted about the potential exploitation
    2. To encourage reporting, financial service providers acting in a reasonable manner are immune from liability for reasonable actions taken in response to a reasonable belief that exploitation has occurred or is being attempted

The bills were based on legislation passed in Tennessee in 2017 that applies to financial service providers as well as legislation passed in Alabama in 2016 that applies to investment advisors and broker-dealers. The bills were referred to the House Financial Services and Senate Banking and Insurance Committees. Both bills will be on committee agendas next Wednesday.

As always, Capitol Notes provides readers with a brief summary of legislation that might impact Alabama’s banking industry. Those summaries are as follows:

House Bill 62 by Rep. Chris Pringle (R-Mobile) expands the Alabama Residential Mortgage Satisfaction Act to include commercial agricultural property, meaning secured creditors would be required to record the satisfaction of a mortgage for commercial agricultural property upon a written request of a mortgagor or a creditor of the mortgagor. The bill was referred to the House Financial Services Committee and will be on next week’s agenda.

Senate Bill 103 by Sen. Linda Coleman-Madison (D-Birmingham) increases the fee paid to probate judges to record mortgages and earmarks the additional revenue to the Housing Trust Fund. Under current law, the recording tax equates to $75 for every $50,000 of indebtedness, with the revenue distributed to probate judges, counties, and the state. Under this proposal, the recording tax would equate to $100 for every $50,000 of indebtedness. The revenue would still be distributed to probate judges, counties, and the state, but one-tenth of the revenue would also be distributed to the Housing Trust Fund. This fund was created several years ago but has never been funded by the Legislature. Funds would be allocated by an advisory board to non-profit entities around the state that work to provide low-income housing. The bill was referred to the Senate Governmental Affairs Committee.

As of the end of the fourth legislative day, legislators have introduced 443 bills – 251 in the House and 192 in the Senate – and 50 resolutions. The 2020 Regular Session can last for no more than 30 legislative days and must end on or before May 18.

The Legislature will reconvene for its fifth legislative day on Tuesday.