The proposed Committee substitute to Senate Bill 140. Senator Bingham you have the floor. [SPEAKER CHANGES] Thank you. Thank you Mr. Chairman. Is this mike working? Okay. [SPEAKER CHANGES] Loud and clear. [SPEAKER CHANGES] Just a little history about this bill: In the 2011-12 session I introduced the bill Senate bill 449 which is now session law 211-189 which created the task force on fraud and abuse against older adults, and myself and Hugh Blackwell from the House got together and we created this task force, and we recruited representatives from the Department of Justice and maybe some of these folks here I hope, and the Commission of Banks, Social Service and others. What inspired this, I had a lady from my district who was scammed over a million dollars in which she wired funds out of the country, and of course you know by that happening... and this lady unfortunately and sad to say, I'm not going to tell you who she is but, at any rate she worked with the banking system. But, this gentleman that was involved in this was out of Charlotte and I don't have anything against Charlotte, but they had some, a very clever and well- spoken gentleman who was obviously in the securities and exchange and knew a lot about it and he was very persuasive. At any rate we got together and divided up into four groups, the task force. There was recommendations made from those task force. So this was a year’s work in the interim. The National Council on Aging indicates that this is one of the worst problems and they gave a report that came out sometime the year following and it named Lexington and Thomasville as two of the top ten cities in the country of fraud and abuse, and of course both those towns were from the county in which I represent and live. Also 90% of all reported elder abuse is committed by the persons' family; grandchildren, nieces, nephews and others. So what this bill does, it fights the growing problem on fraud and it describes, because there was no description. These laws hadn't been updated since the early seventies, so it’s been close to forty years since these laws have been updated. A lot of this nowadays is with computers etc. because you can imagine the computers in the seventies were about like the computer I used today but, because I don't use one. But anyway none of the financial records have been... Anyway, I'm not going to get into any of the details of this. It's in the bill. I don't know of anyone that is opposed to this. I hope you'll... If you have any questions I've got several folks here to help me answer some of these questions but this has been an extensive and long going process and I know all of you are aware locally of a lot of the elderly who have been... It's just been certainly a tremendously growing problem and I appreciate your support. Thank you Mr. Chairman. [SPEAKER CHANGES] Are there any questions from the members of the committee? Senator Allran. [SPEAKER CHANGES] Thank you Mr. Chairman. Senator Bingham thank you so much for putting this bill forward, its... This is such a problem and it's so evil that these people victimize the elderly. It's terrible. Thank you so much for the bill and I know you don't like to go through bills too much in detail but could we have someone who would at least give us the highlights of what we're doing? Even though I know that you don't like to do this Mr. Bingham, which is fine. [SPEAKER CHANGES] Absolutely. Sorry Mr. Chairman may I have... [SPEAKER CHANGES] Yes. Go ahead Senator Bingham. [SPEAKER CHANGES] Is Representative, oh I'm sorry, is Ms. Farmer here from the Attorney General's office? Oh great. Would you mind because she has been wonderful from the Attorney General's office and she helped a lot. She is a very clever attorney and she helped considerably with this bill. She and several others from the Attorney General's office and at least I hope I'm not imposing on you but. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Ms. Farmer please state your name for the record
Please before your remarks, [SPEAKER CHANGES] Caroline Farmer, I’m Deputy Director at North Carolina Attorney General’s office. [SPEAKER CHANGES] Please go ahead with you remarks. [SPEAKER CHANGES] I wasn't necessarily prepared to make remarks but basically in going through this bill the first section of has to do with including people who have not been, they are not disabled. They are not incapacitated, but yet they are being taken advantage of, and based on the current state of the law we were excluding them from being able to be protected. Another portion of it has to do with ease of access. Allowing people to investigate more readily. The cases by getting information from financial institutions and alerting people that we are close to the older adult, to make sure that they know about the fraud that was going, being perpetrated against the older adult. That has to with general… I would recommend we probably have people who were in the committee discussing specific ones. If there’s questions about specific ones. We could discuss those. [SPEAKER CHANGES] Thanks you Miss Farmer. Let’s have.. [SPEAKER CHANGES] Mr. Chairman, [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] I think there’s been Ms. Mitoula wants to. [SPEAKER CHANGES] I was just going to ask her to comment further Ms Mitoula from our staff. Ms. Farmer isn't she? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Let Ms. Mitoula if we will. She’s prepared to go item by item through the bill. [SPEAKER CHANGES] ?? I promise I won’t take too long but I’ll go sought of section by section. First of all the proposed committee substitute makes only technical changes to the bill. It doesn't make anything substantial. If you really want me to tell you what those are I can. But section 1 changes amends criminal law on false pretenses and cheats. It changes older law, and it broadens the definition consistent with what the Ms. Farmer was saying. The amended definition keeps the requirement for 60 years of age or older in place but removes the language requiring diminished capacity. General statue 14 112.2c is amended to make it unlawful for a person to knowingly by deception or intimidation endeavor to, conspire to obtain or use an older disabled adult’s funds, assets or properties with the intent to temporarily or permanently deprive the individual of use benefit or possession depending on the money involved it’s punishable by Class G, H or I felony. Sections 2A and B amend the financial privacy act. General statue 53B4 is amended to allow government access to a financial record held by a financial institution when it’s described with reasonable specificity and access is sought as a result of an investigation to a suspected financial exploitation involving an adult. The written notice must be delivered to the financial institution either by and it depends on whether the adult is disabled or meets the definition of older. So it’s delivered by county department of social services, if it’s a disabled adult and that pursuant to 108A 106.1 or a law enforcement agency for a financial exploitation of an older adult and that’s pursuant to 108A 116.1 Section 2B is just a conforming change and requires the financial institution to make those records available. However if they receive a notice from a customer challenging the notice of investigation, then the financial institution will suspend their efforts. Section 3 pertains to disabled adults on the whole and section 4 mostly pertains to older adults. So back to section 3 it requires the financial institution to provide financial records of a disabled adult customer if Director of the County Department of Social Services delivers to the financial institution a signed written notice on department letterhead under the following conditions: that they are investigating a credible report, and the adult has been financially exploited, is being or has been, that the disabled adult’s financial records are needed to substantiate or evaluate the report and three that time is of the essence in order to prevent further exploitation of that adult. 106A, I mean 108A 106.1B requires that copies of the adult’s financial records to be kept confidential subsection C removes liability for those who provide secret ??
financial records or other information or provide testimony, as long as they are acting in good faith. Subsection D prohibits a customer from indictment or criminal prosecution, punishment or penalty due to anything disclosed by the financial institution, however, following up on what Senator Bingham said about family members, the immunity does not apply to criminal or civil proceedings against a joint account owner accused of financial exploitation of disabled adult, a joint account holder. Section 4 enacts a new Article 6A to ?? 108A, Chapter 108A, entitled Protection of Older Adults from Financial Exploitation. 108A114 ?? encourages but does not require a financial institution to offer older adult customers the opportunity to submit and periodically update a list of persons the bank should contact in case of suspected exploitation of the older adult. 108A115 provides that the financial institution,officer or employee with reasonable cause to believe an older adult is a victim or target of financial exploitation must report to the persons on the list, if they elected to have a list, and to the proper law enforcement agency. Again, the liability is removed from the financial institution if they act in good faith and all those similar things for disabled adults are in place for older adults in 108A116 A, B, and C. Section 5 of the PCS extends the task force on fraud against older adults to allow it to report to the Joint Legislative Oversight Committee on Health and Human Services prior to the 2014 regular session. The task force will terminate May 1, 2015 or upon filing its final report, whichever comes first. It also requires the North Carolina Credit Union League and an association representing non-depository financial institutions to be added to the task force. Sections 1, 2 3, and 4 become effective on the first day of the month, that's six months after the act becomes law and the rest is effective when it becomes law. [SPEAKER CHANGES] Thank you, Ms. Matoula and thank you, Ms. Farmer, for the explanation of the bill. Do you have anything else to add at this time, Senator Bingham? [SPEAKER CHANGES] No, I just hope we'll pass it and that will please me very much. [SPEAKER CHANGES] I note from the language that I am no longer an elderly adult, I am an oldery adult. I'm grateful for that change. Senator Kennard? [SPEAKER CHANGES] Thank you, Mr. Chair. Wonderful bill. I just commend you for doing this because it is an increasing problem. I have a question that might or might not be able to be answered. I have a constituent whose mother is in a retirement community and they think the brother who is on the checking account is taking the money. Would this be any help for someone who is a close relative who supposedly has the confidence of the victim? [SPEAKER CHANGES] Yes, Yes m'am. If Teresa, this is one portion of the bill, there was a lot of discussion on because it is relatives and close, and this will definitely help but Teresa, do you mind helping me with this? [SPEAKER CHANGES] Yes sir. There was one thing that I mentioned and one that I didn't mention. In the voluntary list that the financial institution can ask the customer if they would like to have them keep, they would notify a family member of some suspected activity, if they do have a list in place. Of course, if the person who was suspected was the family member, they would not notify the family member. The one thing I did point out is, with regard to the liability for, and I'm sorry, I am trying to find the section, it removes the liability, I'm sorry, financial, let's see [SPEAKER CHANGES] I think it's ?? financial records against the account ??. [SPEAKER CHANGES] Yes, it's on page 3, beginning on Line 17. This is for the disabled adult but there is similar provision for the older adult. And if you look at Line 20, it says not withstanding the foregoing information obtained may be used against a person who is a joint account owner accused of financial exploitation if the disabled adult and again there is a similar one for the older adult, but soley for criminal and civil proceedings directly related to the alleged financial exploitation so I think if they are a joint account holder, it does not give
them immunity if they are the one suspected. [SPEAKER CHANGES] I'm sorry, I just have one quick follow-up. Who prosecutes this, the district attorney and the local district where the crime occurs? [SPEAKER CHANGES] Counselor, I can't answer that but I'm sure there's somebody here that can. [SPEAKER CHANGES] Barbara seems to think it's the district attorney but perhaps Ms. Farmer will be able to give us a little more insight on who does that. [SPEAKER CHANGES] Yes sir, it's the district attorney. [SPEAKER CHANGES] Does that answer your question, Senator Kinnaird? Senator Tucker? [SPEAKER CHANGES] I'll yield to my peer here to my left, he was the one that had his hand raised, but I will make one comment. Since most of us on the committee are older than 60 I would imagine this bill will pass. [SPEAKER CHANGES] If we can remember what we're voting for. Senator Stein. [SPEAKER CHANGES] Thank you, Mr. Chairman. A couple of technical questions, maybe for staff, and first, Senator Bingham, thank you for bringing this bill. It is important and upon reading it looks quite good. My question for staff is are there substantive protections in section 4 for older adults that are not in section 3 for disabled adults or are they co-extensive? [SPEAKER CHANGES] I don't know that there are protections that are different. There are differences, of course, in the definition of the disabled adult which usually involve some diminished capacity and that's one of the things that this bill is changing for the definition of an older adult is that it's removing the diminished capacity. [SPEAKER CHANGES] Follow-up question. [SPEAKER CHANGES] Go ahead, sir. [SPEAKER CHANGES] I understand that there's a definitional difference between disabled and older adult and I just haven't sat and done a crosscheck to see, if you just read section 4 it's substantially longer than section 3 and I just, if there are protections in section 4 that are not in section 3 we could just rename article 6a "protection of older adults and disabled adults from financial exploitation" and then just insert disabled adults into that section and give them the same protection that we're giving older adults. But we don't want disabled adults to have lesser protections. But if what you're saying is that everything that's in section 4 is also in section 3 then maybe that isn't necessary. [SPEAKER CHANGES] I don't believe that there is substantially anything different in the two except that section 4 does provide the language in there with regard to the financial institution allowing the older adult customers to maintain the list of contacts for them. And that's in 108a 114. I don't know exactly why it was set out the way it was except that we did have existing statutes that it was amending for the disabled adults and we were putting new protections in place for older adults. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] And Senator Stein, this bill, if it gets a favorable report here, is going to be referred to a judiciary committee. [SPEAKER CHANGES] One other technical question, if I may, Mr. Chair? [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] In section 3, this 108a-106.1, is that, I don't know where that sits int he general statutes. Is that in a disabled adult section so that we don't need to define disabled adult in this section? Because we define, in subsection e, a whole bunch of terms but we don't define disabled adult there. [SPEAKER CHANGES] I'm pretty certain that it is and I'll look while I'm talking to you. The definition for disabled adult, I provide it in my summary, is set out in 108a 101. It is putting it in article 6 of 108a and, hang on just a second and I'll tell you what, article 6 is on disabled adults. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Does that answer your question? Senator McKissick? [SPEAKER CHANGES] And I too, Senator Bingham, would like to commend you on bringing this bill forward. I think it's an excellent bill and I
Some cases dealing with this sort of exploitation including one in Pearson County fairly recently involving about $1.8 million. The thing that I do have some questions about and they're sort of technical questions, it allows the person who is Director of Social Services in a county to go out and get financial records that relate to a particular individual. The thing it does not state is if those financial records are requested or obtained, who pays for it. Now you have somebody who's going to have to originate the original request and it's probably going to be a family member, somebody who knows that person who's a close confidant. Sometimes these records go back 5-10 years. Most financial institutions don't have a problem producing them, but they're going to want somebody to pay for it. So has that been considered and do you need to put in here that it's going to be produced by the institution at no charge to the Department of Social Services because it could get pretty costly if there are a number of accounts, particularly if you're looking at accounts with institutions outside the state of North Carolina, brokerage accounts, all types of accounts that can be involved. I've seen situations where you've had 5 different accounts that you've had to go back and get records for years, so it doesn't really state that and so it's more of a technical question and perhaps staff can state what was anticipated because there's a practical matter that will be a true concern if this is utilized. [SPEAKER CHANGES] Certainly, Senator McKissick I understand your question, but I'll have to rely on either, whoever you wish Mr. Chairman. [SPEAKER CHANGES] I think Miss O'Toole is ready to answer. [SPEAKER CHANGES] Senator McKissick, I don't know exactly who's paying for them now. What I will tell you is that it's amending 53b-4, access to financial records, and there are currently 12 other instances and when financial records need to be provided so there's a possibility at least that by adding the 13th it may be treated in a like manner, I just don't know how those other 12 circumstances are treated now. I apologize. I don't know if there's anybody here from a financial institution or perhaps someone from the task force looked at this. I don't know. [SPEAKER CHANGES] Recognize anyone from the task force who worked on this legislation who might have the answer to that. [SPEAKER CHANGES] Mr. Chairman, I think they're discussing among themselves. We'll see if we can get someone to answer that for you. Miss Farmer, do you have someone that could help us with this cause I'm sure it was discussed. [SPEAKER CHANGES] Sir, identify yourself, please. [SPEAKER CHANGES] Thank you, Mr. Chairman. My name is David Kirkman, I'm a special deputy attorney general in the consumer protection division and I had the honor of serving on this legislative task force on the committee that helped bring forth the language that's on this bill, and our subcommittee was comprised of law enforcement, state and local, as well as the whole array of financial institutions and when we discussed this particular provision about the production of the documents, the question of the cost really never came up and again it was because of the point that was just made. The financial institutions already have to produce this information in other contexts. The only point at which anything close to that was brought up was the fact that sometimes there are older documents that are kept in paper form. More recent documents are kept electronically and the bank indicated they could be produced fairly quickly and cheaply but they needed more time when it came to the older documents, but no discussion was actually had on the cost of them, so that's as far as it got on that issue. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Senator McKissick, go ahead. [SPEAKER CHANGES] What I would suggest, let's go ahead and move the bill out of committee today but let's sit down and talk about how we might address this in a way that we don't want the Department of Social Services paying for it. If the person originating complaint really thinks there's substance to it, maybe they could be looked to. The banks should not necessarily have to just absorb that cost, but when a bank calls you up and says it's $1,500-2,000 to reproduce certain groups of records, it's a real concern that we need to try to somehow make certain is passed onto the appropriate party, particularly because we want this to be utilized and if the goal is to make sure that the banks absorb the cost then we just need
Be clear about that in the Infinium your questions just a quick follow-up on the way we're handing liability today interims these joint accounts perhaps aloofness that can address that because technically we put some of you and your account is a joint account subreport from excess you might have otherwise those funds can be withdrawn at any time by either party or by any party and is considered jointly own funds so what are we doing today about this issue so that I can declare my mind that we are moving in a how how we are changing and I was changing just production records right now the Harley handling a Of liability issue of surgery McKissick on the know that question it was addressed in and in appreciate your willingness to allow this to move on it will will my can effort will get the functions are back and grinned together will try to come up with amendment that we satisfactory and Amber Theresa May one of our fitness chairman your permission address your issue against the your account holder etc. that's in this video I was absolutely prepared answer before him and that I know on the answer case x real question on the only place a awareness velvets addressing the joint account holder issue is that provision that pointed out for disabled adults on page 300 and on line 17 and specifically the joint account holders address someone 21 324 and capacity with the issue of if the joint account holder is the person who is suspected financial exploitation and how they would be treated under criminal and civil proceedings I feel I don't have a complete answer to your question thinner McKissick but if you guys to ejaculate how they connect now being something that I can take a look at furniture thank you for of Sen. Orin Hatch thank you I might have missed this in this realm rather detailed discussion with in session wanted their the references the elder Dolan flyer the ref references to elder Dolan section session was not sorry if authority been discussed and I miss you and is one of the things that the-ese of such a is changing if there is an existing one ECS. As outlined LA Kings isolates are things that we need to think and always on the existing language a lot and if anything is just an oversight feeling it has that's even if in 19 and 28 and 29 twice in 19 in several of which we can change in the BCS is that the medically desires you have to do that you have to because you you define a little Pacheco even to find a little niche actually a distinction if it's the same thing if it's the same thing same thing actually to be consistent will recheck your center aunt Sandra Joan cellulitis have one question on who in the world is that a six-year-old an old person autoload let me first start 11 has answer to that howitzer have no answer exactly but I'm certainly glad that you looking out for me when I get to that age why I work it out for you so when somebody is level? I this was a fraud exploitation and deception apply to use of the mails to do with this chairman this on my Assistant Attorney General I had for extensive staff there if they would mind helping me with that? I would think so but I'm but let me confirm it for a answer something incorrect mamas form is coming up I like to remind the committee that would help him will build ago we got a get out of here by 1150 it is
Answer is yes, we've prosecuted for these scams going through the mail. [SPEAKER CHANGES] Say the word before the mail again. [SPEAKER CHANGES] We've prosecuted for scams going through. [SPEAKER CHANGES] Thank you. I have a follow up. [SPEAKER CHANGES] Senator Woodard, excuse me. [SPEAKER CHANGES] Thank you, Mr. Chair. Question for the chair. You said this was going to K2 after this. [SPEAKER CHANGES] Probably J1. [SPEAKER CHANGES] J1, sorry. Then it seems to me a lot of the legal questions that have been raised, and it's been a very rich dialogue with the number of attorneys here, I think a lot of those will be hammered out in a PCS there I suspect, and Senator Bingham I just want to say to you thank you for this bill. I just wrapped up a case with a family in Castle County just yesterday and if we had had this legislation that would have made my job as a senator a lot easier to get this done so I commend you and the members of the task force for bringing this forward and with that, Mr. Chair, I'll move that we favorably report the PCS out. [SPEAKER CHANGES] Hold on on that just one second. Senator Rabin. [SPEAKER CHANGES] Can the lady from the attorney general. The answer that you gave was yes you do prosecute for using the mails for scam, my question was is it included in this bill? [SPEAKER CHANGES] I don't believe that that specific thing is included as all crimes are, phone, mail, other means. It's a matter of means, of access. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Senator McKissick. [SPEAKER CHANGES] Just a quick thing for staff to look into as well. It looks like to get these records you're typically serving a local branch manager or somebody who's a registered agent for service of process in North Carolina. There are lots of financial institutions that somebody might transact business with that are outside the state of North Carolina and do not have agents to serve process in this state. Look at what can be done to try to fix that and maybe a bank out in California, Chicago, anyplace, they can just look in the Wall Street Journal, find a high yielding place for an account, so think about how you're going to serve these people who don't have registered process agents or a branch here in North Carolina to get that same information. [SPEAKER CHANGES] Senator Woodard has moved for a favorable report to this PCS, however Senator Allran has an amendment that I'm going to allow him to process his amendment and then we'll roll the whole thing into a new PCS before it goes to J1. Senator Allran. [SPEAKER CHANGES] It's simply to change elder to older to make the whole thing consistent, what we already talked about. [SPEAKER CHANGES] Does anyone need copies of this amendment? If not, all those in favor of the amendment presented by Senator Allran, please say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, no. The amendment carries and now we have before us the original PCS with this amendment which will be rolled into a new PCS. Senator Woodard, is that your motion? Any further discussion? And this is going to a J1 committee with the new PCS rolling in this amendment. All those in favor please say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, say no. And the motion carries, thank you very much. Senator Bingham, I don't know if we have time for your second one or not, are you willing to take a stab at it? [SPEAKER CHANGES] Absolutely. [SPEAKER CHANGES] Thank you very much, and I thought this just went through the J committee, but anyway we'll try another one. Senate Bill 83. [SPEAKER CHANGES] Thank you, Mr. Chairman. This bill has been. [SPEAKER CHANGES] Excuse me just a second, we have a PCS to Senate Bill 83, is there a motion to, Senator Wade recommends that we consider the PCS. Go ahead Senator Bingham. [SPEAKER CHANGES] OK, thank you, Mr. Chairman. Actually this bill, I have been working on several years and what has happened in the North Carolina free clinics, there are a lot of doctors who are willing to volunteer their time and nurses for one and a half million uninsured citizens in the state and these clinics provide 172 million dollars in free services each year and medical professionals are concerned about volunteering. I had, because of the malpractice liability, and what this does, it addresses that issue and Nick Taylor from the trial lawyers association
[SPEAKER CHANGES]: And John Carl who is with the free clinics, we worked on this and they are both in the audience, and I was ?? to see them stand together and agree on this bill. So, it's made up happy day for makers, we have been a long time in term and so be happy to try to answering questions. If not both issues ?? they can help me with this and also with directors of the free clinics in North Carolina. So, I would appreciate your support. [SPEAKER CHANGES]: Senator Davis. [SPEAKER CHANGES]: Thank you Mr. Chairman, senator Bingham thanks for bringing this forward. I have participated in some of these free clinics, so to give health care providers that are donating their time, some immunity from being prosecuted for doing that is very grateful. So much determined, had an appropriate time, I will move for a favorable report to the PCS, is that correct. [SPEAKER CHANGES]: Yes. [SPEAKER CHANGES]: Thank you, so if there are any other questions, yes our Senator Curtis. [SPEAKER CHANGES]: I too support the bill. I had an experience on this issue when Katrina devastated Mississippi. I went down and did a clinic for a week, and the governor of Mississippi by executive order made all ?? State health care providers, employees of the State for that week, and so they would have defended us if we have been sued regarding that free care. So, I certainly come in this bill, thank you sir. [SPEAKER CHANGES]: For the questions from members of the committee hearing non Senator Davis has recommended favorable report, as to the committee substitute for Senate bill 83, unfavorable as to the original bill, all those in favor say Aye. [SPEAKER CHANGES]: Aye. [SPEAKER CHANGES]: All oppose me say no, and Senator Bingham congratulations, you have got out of here ??. [SPEAKER CHANGES]: Thank you sir, I have ??. Thanks all of you for your help on this bill and see you again soon. [SPEAKER CHANGES]: Committee is adjourned.