§3423 — Title 12 Banks and Banking | U.S. Code

Summary

Lets people who work at banks, credit unions, brokerages, insurance companies, and similar firms avoid being sued when they report suspected financial abuse of a person age 65 or older to the proper agencies. To get that protection, the person reporting must have had the required training, must have been a supervisor, compliance or legal officer (or a registered representative, investment adviser representative, or insurance producer who is affiliated with the firm), and must have reported in good faith and with reasonable care. The firm is also protected for a report by such a trained employee. The rule does not protect anyone for other wrongful acts like fraud. Key defined words in simple terms: Bank Secrecy Act officer — the person who makes sure the firm follows Bank Secrecy Act rules; broker-dealer — brokers and dealers; covered agency — agencies like state financial regulators, the SEC, law enforcement, and adult protective services; covered financial institution — credit unions, banks and similar firms (investment advisers, brokers, insurers, transfer agents); senior citizen — someone 65 or older; exploitation — illegal or fraudulent use or denial of a senior’s money or property. Training must teach how to spot and report abuse, protect customer privacy, and match the worker’s job. Firms must keep training records and the training content, give training as soon as possible (and within 1 year for hires after May 24, 2018), and give records to examiners on request. Federal protection only overrides state law if it gives greater protection from liability.

Title 12, §3423

Banks and Banking — Source: USLM XML via OLRC

(a)(1)In this section—

(A)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 (commonly known as the “Bank Secrecy Act”);

(B)the term “broker-dealer” means a broker and a dealer, as those terms are defined in section 78c(a) of title 15;

(C)the term “covered agency” means—

(i)a State financial regulatory agency, including a State securities or law enforcement authority and a State insurance regulator;

(ii)each of the Federal agencies represented in the membership of the Financial Institutions Examination Council established under section 3303 of this title;

(iii)a securities association registered under section 78o–3 of title 15;

(iv)the Securities and Exchange Commission;

(v)a law enforcement agency; or

(vi)a State or local agency responsible for administering adult protective service laws;

(D)the term “covered financial institution” means—

(i)a credit union;

(ii)a depository institution;

(iii)an investment adviser;

(iv)a broker-dealer;

(v)an insurance company;

(vi)an insurance agency; or

(vii)a transfer agent;

(E)the term “credit union” has the meaning given the term in section 5301 of this title;

(F)the term “depository institution” has the meaning given the term in section 1813(c) of this title;

(G)the term “exploitation” means the fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or a fiduciary, that—

(i)uses the resources of a senior citizen for monetary or personal benefit, profit, or gain; or

(ii)results in depriving a senior citizen of rightful access to or use of benefits, resources, belongings, or assets;

(H)the term “insurance agency” means any business entity that sells, solicits, or negotiates insurance coverage;

(I)the term “insurance company” has the meaning given the term in section 80a–2(a) of title 15;

(J)the term “insurance producer” means an individual who is required under State law to be licensed in order to sell, solicit, or negotiate insurance coverage;

(K)the term “investment adviser” has the meaning given the term in section 80b–2(a) of this title;

(L)the term “investment adviser representative” means an individual who—

(i)is employed by, or associated with, an investment adviser; and

(ii)does not perform solely clerical or ministerial acts;

(M)the term “registered representative” means an individual who represents a broker-dealer in effecting or attempting to effect a purchase or sale of securities;

(N)the term “senior citizen” means an individual who is not younger than 65 years of age;

(O)the term “State” means each of the several States, the District of Columbia, and any territory or possession of the United States;

(P)the term “State insurance regulator” has the meaning given the term in section 6735 of title 15;

(Q)the term “State securities or law enforcement authority” has the meaning given the term in section 78x(f)(4) of title 15; and

(R)the term “transfer agent” has the meaning given the term in section 78c(a) of title 15.

(2)(A)An individual who has received the training described in subsection (b) shall not be liable, including in any civil or administrative proceeding, for disclosing the suspected exploitation of a senior citizen to a covered agency if the individual, at the time of the disclosure—

(i)served as a supervisor or in a compliance or legal function (including as a Bank Secrecy Act officer) for, or, in the case of a registered representative, investment adviser representative, or insurance producer, was affiliated or associated with, a covered financial institution; and

(ii)made the disclosure—

(I)in good faith; and

(II)with reasonable care.

(B)A covered financial institution shall not be liable, including in any civil or administrative proceeding, for a disclosure made by an individual described in subparagraph (A) if—

(i)the individual was employed by, or, in the case of a registered representative, insurance producer, or investment adviser representative, affiliated or associated with, the covered financial institution at the time of the disclosure; and

(ii)before the time of the disclosure, each individual described in subsection (b)(1) received the training described in subsection (b).

(C)Nothing in subparagraph (A) or (B) shall be construed to limit the liability of an individual or a covered financial institution in a civil action for any act, omission, or fraud that is not a disclosure described in subparagraph (A).

(b)(1)A covered financial institution or a third party selected by a covered financial institution may provide the training described in paragraph (2)(A) to each officer or employee of, or registered representative, insurance producer, or investment adviser representative affiliated or associated with, the covered financial institution who—

(A)is described in subsection (a)(2)(A)(i);

(B)may come into contact with a senior citizen as a regular part of the professional duties of the individual; or

(C)may review or approve the financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen.

(2)(A)The content of the training that a covered financial institution or a third party selected by the covered financial institution may provide under paragraph (1) shall—

(i)be maintained by the covered financial institution and made available to a covered agency with examination authority over the covered financial institution, upon request, except that a covered financial institution shall not be required to maintain or make available such content with respect to any individual who is no longer employed by, or affiliated or associated with, the covered financial institution;

(ii)instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen internally and, as appropriate, to government officials or law enforcement authorities, including common signs that indicate the financial exploitation of a senior citizen;

(iii)discuss the need to protect the privacy and respect the integrity of each individual customer of the covered financial institution; and

(iv)be appropriate to the job responsibilities of the individual attending the training.

(B)The training under paragraph (1) shall be provided—

(i)as soon as reasonably practicable; and

(ii)with respect to an individual who begins employment, or becomes affiliated or associated, with a covered financial institution after May 24, 2018, not later than 1 year after the date on which the individual becomes employed by, or affiliated or associated with, the covered financial institution in a position described in subparagraph (A), (B), or (C) of paragraph (1).

(C)A covered financial institution shall—

(i)maintain a record of each individual who—

(I)is employed by, or affiliated or associated with, the covered financial institution in a position described in subparagraph (A), (B), or (C) of paragraph (1); and

(II)has completed the training under paragraph (1), regardless of whether the training was—

(aa)provided by the covered financial institution or a third party selected by the covered financial institution;

(bb)completed before the individual was employed by, or affiliated or associated with, the covered financial institution; and

(cc)completed before, on, or after May 24, 2018; and

(ii)upon request, provide a record described in clause (i) to a covered agency with examination authority over the covered financial institution.

(c)Nothing in this section shall be construed to preempt or limit any provision of State law, except only to the extent that subsection (a) provides a greater level of protection against liability to an individual described in subsection (a)(2)(A) or to a covered financial institution described in subsection (a)(2)(B) than is provided under State law.

Notes & Related Subsidiaries

Editorial Notes

References in Text

For the Bank Secrecy Act, referred to in subsec. (a)(1)(A), (2)(A)(i), see

Short Title

note set out under section 1951 of this title and Tables. Codification Section was enacted as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act, and not as part of the Right to Financial Privacy Act of 1978 which comprises this chapter.

§3423 Immunity from suit for disclosure of financial exploitation of senior citizens