SACRAMENTO, Calif. – California’s controversial elder abuse bill passed the state’s legislature on August 15, the first day the body reconvened from summer recess. The bill now awaits Governor Schwarzenegger’s signature. SB 1018 requires financial institution employees to act as mandated reporters, with the responsibility of recognizing suspected elder and dependent adult financial abuse and reporting it to authorities. Although the bill requires credit union employees to act as mandated reporters, the California Credit Union League no longer opposes the bill. “The league is officially neutral on the bill because of changes our Sacramento team was able to negotiate in the assembly,” said Tina Ramos-Ingold, League Representative. League negotiators, along with representatives from the California Bankers Association, were able to add amendments to the bill which include the reduction of penalties from criminal to civil, penalties assessed only in the event the employee willfully does not report suspected abuse, a delayed implementation of the bill, and a sunset provision. Bill implementation was delayed one year, going into effect January 2007 if signed into law, and the sunset provision requires the bill to be extended by the legislature in 2012. If not extended, the law will simply expire. State Senator Joseph Simitian (D-Palo Alto) was pleased that amendment negotiations eventually dropped industry opposition to the bill. “The bill got out of the Senate with some fairly significant amendments taken, but it wasn’t enough to remove opposition from the financial services industry,” Simitian said. “So when we got to the Assembly, we had a series of meetings with stakeholders, and were able to hammer out a number of amendments, which taken as a whole, were enough to remove opposition from the California Credit Union League and the California Bankers Association.” Simitian said the delay in implementation will provide time for credit unions to put training and policy and procedures in place. “The sunset provision will make sure the law works,” he added, “and it gives everybody some reassurance that if there are problems with the law, they will be dealt with.” Simitian said additional negotiations also addressed some liability concerns held by industry groups. “We made it clear in the bill that fines are the exclusive remedy for failure to report suspected abuse,” Simitian said, adding, “we wanted to make sure we didn’t hold people up to some new liability by virtue of private right of action.” The amended version approved by the legislature mandates that enforcement can only be brought by the state attorney general, district attorney or county counsel, preventing private party suits. Last month, the California Credit Union League donated $5,000 to the Elder Financial Protection Network to help finance the production of a Web-based version of the organization’s award-winning Be Wise video training program, which trains employees of financial institutions to recognize and report suspected financial abuse of the elderly. Ramos-Ingold said the Web-based training would assist credit unions in preparing employees to comply with the law, if signed by the governor. “The Web-based version should be available sometime this fall,” she said. Despite less than enthusiastic concurrence from industry groups, Simitian feels there are advantages to the potential new law. “One of the issues that has come up is for the financial institution to be concerned about customer reactions when they contact them regarding suspected abuse, but we’ve found in other states it’s easier if they can say `I’m sorry, but we’re required to do this by law,’” Simitian said. “That way, it doesn’t seem like the financial institution is overstepping its authority by questioning a transaction,” he said. Senator Simitian has a history of championing elder financial abuse prevention that dates back eight years, when he served on the Santa Clara County Board of Supervisors. “I felt we had done some good work in Santa Clara County, and it was that work that helped grow my interest and expertise on the issue,” he said. Simitian also chaired a select committee on elder abuse for two years while serving as a member of the state assembly. The senator said he held county hearings on the issue, and to avoid the tendency for the public forums to turn into “just an opportunity to gripe,” he required constituents to suggest a solution for the problem. “The need for mandated reporters in the bank and credit union worlds was the most common suggestion we received in the hearings – we heard it over and over again,” he said. -

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