In 2019, Utah news media reported on several high-profile wire-fraud cases. In response, Utah’s new law, the Financial Exploitation Prevention Act (“H.B. 459”) took effect on May 12, 2020. This new law, passed by both houses of the Utah Legislature with bipartisan support, aims to increase protections for vulnerable individuals from financial fraud and abuse.
As in other parts of the Utah Code, H.B. 459 defines a “vulnerable adult” as someone who is over age 65, or who is a dependent adult with a mental or physical impairment which substantially affects the person’s ability to care for themselves or manage their own financial resources. The new law permits a covered financial institution (“CFI”) to delay certain financial transactions, and to notify co-owners of accounts, a law enforcement agency or the state’s Adult Protective Services of suspected financial exploitation of a vulnerable adult. It grants broad immunity to a CFI for both acting under HB 459, or declining to act, and requires the Office of the Attorney General’s website to feature current information on financial scams and resources for the public.
First and foremost, H.B. 459 allows a branch manager or other designated bank officer or employee to delay a wire transfer in the event that financial exploitation is suspected, and to contact a law enforcement agency, or a joint owner on an account, if one exists. The transaction delay is permitted until the CFI reasonably determines that the wire transfer is not financial exploitation, or for fifteen (15) days after initiation of the wire transfer, whichever is earlier.
HB 459 also provides that a CFI may delay types of transaction other than wire transfers, if its branch manager or other designated officer or employee believes that executing the transaction will result in financial exploitation of the vulnerable adult, or if a law enforcement agency provides the CFI with information demonstrating that financial exploitation of a vulnerable adult may be occurring. In that instance, the CFI is required to send notice and the reason for the delay to each party authorized on the account within two business days.
The CFI may also elect to send that information to a law enforcement agency or Adult Protective Services. Additionally, unlike provisions governing wire transfers, the CFI may also notify known family members or designees of the account holder. The CFI may delay the transaction for 15 business days or until the CFI reasonably determines that the transaction will not result in a vulnerable adult’s financial exploitation, whichever is earlier. This delay can be extended to 25 business days upon a request from a law enforcement agency. Furthermore, upon issuance of a court order at the request of law enforcement, CFI, or other interested party, this time can be shortened or extended. A court can also issue other relief upon law enforcement, CFI, or other interested party request.
Lest banks and financial institutions be wary of any increased liability under this new law, HB 459 features an immunity provision for covered financial institutions, providing that a financial institution (or its employees and representatives) do not have a specific duty to act under this chapter, and also are immune from criminal and civil liability if they do not take action allowed under the law. There is also a provision which shields a covered financial institution and its employees and representatives who do take action, unless that action is later found to have been conducted in bad faith. And of course, the immunity described in H.B. 459 does not extend to any individual who is a party to a criminal offense involving the financial exploitation of a vulnerable adult.
Lastly, this new legislation requires the Office of the Attorney General to provide current information on its website regarding financial scams, including common characteristics of financial scams and those financial scams which may be current or trending. The Office of the Attorney General is also required to post resources for a vulnerable adult who suspects a financial scam, and for other individuals who suspect the financial exploitation of a vulnerable adult.
The Utah Financial Exploitation Act is codified at UCA §7-26-101, et. seq.