Committee hears bill to require banks to flag suspected elder financial exploitation and notify state agencies

A House committee heard testimony on House Bill 1,900, which would require financial institutions to notify the Department of Social and Health Services (DSHS) and the Department of Financial Institutions (DFI) and to place internal flags on accounts when employees reasonably believe a vulnerable adult’s funds may have been exploited.

Committee staff member Peter Klauthbelter told members the bill amends a 2010 law on financial exploitation of vulnerable adults so that institutions that have a reasonable belief must immediately notify DSHS and DFI and place an internal account flag that alerts other employees the account may be the subject of exploitation. Klauthbelter said the bill also expands separate provisions requiring immediate notice to DFI when a financial institution or investment professional reasonably believes individual fraud related to funds or securities may have occurred or is being attempted. He said the flagged information is intended for internal use and the bill does not itself require an institution to refuse a transaction.

Why it matters: The bill aims to tighten the pathway for…