Panel advances bill to let banks pause suspected scam transfers and record 'trusted contacts' for residents 55 and older
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Summary
The Banking & Insurance Subcommittee voted to send H.5162 to the full committee after testimony from bankers, credit unions and the Department of Consumer Affairs; the bill would extend permissive transaction holds and a voluntary "trusted contacts" form to adults 55 and older and include an immunity provision for good‑faith actions by financial institutions.
Neil Rashley, general counsel for the South Carolina Bankers Association, told the Banking & Insurance Subcommittee that H.5162 would extend existing law allowing financial institutions to pause suspect transactions involving vulnerable adults so that the same protections apply to “eligible adults” aged 55 and older. “Right now present law allows banks [and other financial institutions] to stop or halt a transaction if a vulnerable adult is being defrauded,” Rashley said. “This proposal actually will deal with adults that are not vulnerable adults … it’s creating a new chapter in title 34.”
Rashley described core elements of the bill: a permissive authority for institutions to place holds when fraud is suspected, required notice to account holders and co‑owners, a timeline for releases (release if no fraud is found, up to 30 days; law enforcement can request up to 55 days), an immunity‑from‑liability provision for institutions that act in good faith, and an optional trusted‑contacts form modeled on medical HIPAA releases. “Section I … is what’s known as the trusted contacts,” he said. “The financial institution does not have to do this and the customer does not have to do this.”
Credit union representatives told the committee they support the bill’s intent but asked for smaller drafting changes. Billy Boylston of the Carolinas Credit Union League said credit unions want to avoid inadvertently losing stronger member protections in existing agreements and urged removing the fixed 55‑day hold in favor of release tied to the completion of an investigation or a court order. “Some of those member agreements do vary … and we just want to ensure that this legislation doesn’t actually take away some of the protections that the credit unions already give,” Boylston said.
Carrie Gruby Lyburger, administrator and consumer advocate at the South Carolina Department of Consumer Affairs, described the office’s identity‑theft unit and fraud reporting and emphasized how point‑of‑transaction pauses can protect victims. She said national and state data show large losses for older adults: “For those who are 60 and over, in 2024, we saw … losses” tied to bank transfers and scams. Committee members asked about outreach to the Department of Aging and the geographic sources of scams; Lyburger and witnesses described both domestic organized operations and international networks responsible for many incidents.
A committee member moved to adopt amendments and later moved to send the bill as amended to the full committee. The chair announced the ayes prevailed. The transcript does not record a roll‑call tally or named individual votes.
The subcommittee’s next step is consideration by the full committee, where members may weigh credit‑union drafting requests and the proposed timeline for holds.