Bankers in California are up in arms about proposed legislation that could send bank and credit union employees to jail for failing to report suspected financial abuse of elderly customers to law enforcement officials or the state's Adult Protective Services agency.
A misdemeanor charge could bring six months in jail and a fine of up to $1,000 or both. Those terms would be up to a year and $5,000 or both if failure to report results in the customer's injury or death.
A handful of states already require bank employees to report suspected financial abuse of the elderly, but the bill from Assemblywoman Lois Wolk, D-Vacaville, and a companion bill from Assemblyman Joe Simitian, D-Palo Alto, would make California the only state to impose criminal penalties for failing to do so, according to research by the American Bar Association.
Paul R. Greenwood, a deputy district attorney for San Diego County and the head of its elder-abuse unit, said that he and other attorneys lobbied for the legislation because they had prosecuted too many cases in which bank employees could have easily spotted or reported possible abuse but did not.
In one such case in San Diego County in the late 1990s the limousine driver of an 82-year-old woman with Alzheimer's disease drove her to her bank to liquidate her certificates of deposit, worth about $90,000. The teller - without discussing the transaction with the wheelchair-bound woman - gave the driver a cashier's check made out to someone she presumed was the customer's attorney. But this person was the driver's friend, who cashed the check and depleted the woman's life savings.
Mr. Greenwood said some banks will not take the steps, including training, that can prevent this type of crime.
"Community banks in general have been very cooperative in working with us, but frankly a lot of the larger banks have resisted," he said. These banks say they worry they will be sued if employees mistakenly report abuse, but Mr. Greenwood said customers or their relatives could just as easily sue banks for failing to report legitimate incidences of abuse.
Mr. Greenwood would not name the banks that have refused to institute education programs. He pointed out that the state bills specify that banks and their employees would be free from civil or criminal liability if employees reported suspected abuse in good faith where none had actually occurred.
"After eight years of doing this, I'm tired of the resistance by some banks, and I've come to the conclusion that this kind of legislation is necessary," said Mr. Greenwood, who discussed the state bills at a California Bankers Association conference last week in San Diego.
Anissa Yates, a spokeswoman for the trade group, said it and many of its members oppose the legislation.
"First, we're concerned about the criminal liability that's attached to bank tellers and other front-line employees - that's a very big stick," Ms. Yates said. "We also have concerns about mandating employees. The voluntary education programs that banks have about preventing elder abuse haven't been in place long enough to determine whether or not they help resolve the problem. We need to give these programs a chance before we start mandating employees."
Some banks in the state have developed their own programs, while others use materials provided by the California Community Partnership for the Prevention of Financial Abuse, a San Francisco nonprofit, Ms. Yates said. Most of the banks participating in the program donated funds to produce the materials, which include a video for tellers. The California Bankers Association helped the partnership produce the materials, she added.
Both bills are being reviewed by Assembly committees. Amendments in April by the Public Safety Committee would spare employees liability if they had not received relevant training. Banks can voluntarily provide this training, but Adult Protective Services has the ultimate responsibility, said Dirk Brazil, a spokesman for Assemblywoman Wolk.
