[House Report 114-659]
[From the U.S. Government Publishing Office]


114th Congress   }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                      {      114-659

======================================================================



 
                         SENIOR$AFE ACT OF 2016

                                _______
                                

  July 5, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4538]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4538) to provide immunity from suit for certain 
individuals who disclose potential examples of financial 
exploitation of senior citizens, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

   This Act may be cited as the ``Senior$afe Act of 2016''.

SEC. 2. IMMUNITY.

  (a) Definitions.--In this Act--
          (1) the term ``Bank Secrecy Act Officer'' means an individual 
        responsible for ensuring compliance with the requirements 
        mandated by subchapter II of chapter 53 of title 31, United 
        States Code;
          (2) the term ``broker-dealer'' means a broker or dealer, as 
        those terms are defined, respectively, in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
          (3) the term ``covered agency'' means--
                  (A) a State financial regulatory agency, including a 
                State securities or law enforcement authority;
                  (B) each of the Federal financial institutions 
                regulatory agencies;
                  (C) the Securities and Exchange Commission;
                  (D) a law enforcement agency; and
                  (E) and State or local agency responsible for 
                administering adult protective service laws;
          (4) the term ``covered financial institution'' means--
                  (A) a credit union;
                  (B) a depository institution;
                  (C) an investment advisor;
                  (D) a broker-dealer; and
                  (E) an insurance company;
          (5) the term ``credit union'' has the meaning given that term 
        in section 2 of the Dodd-Frank Wall Street Reform and Consumer 
        Protection Act (12 U.S.C. 5301);
          (6) the term ``depository institution'' has the meaning given 
        the term in section 3(a) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(a));
          (7) the term ``exploitation'' means the fraudulent or 
        otherwise illegal, unauthorized, or improper act or process of 
        an individual, including a caregiver or fiduciary, that--
                  (A) uses the resources of a senior citizen for 
                monetary personal benefit, profit, or gain; or
                  (B) results in depriving a senior citizen of rightful 
                access to or use of benefits, resources, belongings or 
                assets;
          (8) the term ``Federal financial institutions regulatory 
        agencies'' has the meaning given the term in section 1003 of 
        the Federal Financial Institutions Examination Council Act of 
        1978 (12 U.S.C. 3302);
          (9) the term ``investment adviser'' has the meaning given the 
        term in section 202 of the Investment Advisers Act of 1940 (15 
        U.S.C. 80b-2);
          (10) the term ``insurance company'' has the meaning given the 
        term in section 2(a) of the Investment Company Act of 1940 (15 
        U.S.C. 80a-2(a));
          (11) the term ``registered representative'' means an 
        individual who represents a broker-dealer in effecting or 
        attempting to affect a purchase or sale of securities;
          (12) the term ``senior citizen'' means an individual who is 
        not less than 65 years of age; and
          (13) the term ``State securities or law enforcement 
        authority'' has the meaning given the term in section 24(f)(4) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78x(f)(4)).
  (b) Immunity From Suit.--
          (1) Immunity for individuals.--An individual who has received 
        the training described in section 3 shall not be liable, 
        including in any civil or administrative proceeding, for 
        disclosing the possible exploitation of a senior citizen to a 
        covered agency if the individual, at the time of the 
        disclosure--
                  (A) served as a supervisor, compliance officer 
                (including a Bank Secrecy Act Officer), or registered 
                representative for a covered financial institution; and
                  (B) made the disclosure with reasonable care 
                including reasonable efforts to avoid disclosure other 
                than to a covered agency.
          (2) Immunity for covered financial institutions.--A covered 
        financial institution shall not be liable, including in any 
        civil or administrative proceeding, for a disclosure made by an 
        individual described in paragraph (1) if--
                  (A) the individual was employed by, or, in the case 
                of a registered representative, affiliated or 
                associated with, the covered financial institution at 
                the time of the disclosure; and
                  (B) before the time of the disclosure, the covered 
                financial institution provided the training described 
                in section 3 to each individual described in section 
                3(a).

SEC. 3. TRAINING REQUIRED.

  (a) In General.--A covered financial institution may provide training 
described in subsection (b)(1) to each officer or employee of, or 
registered representative affiliated or associated with, the covered 
financial institution who--
          (1) is described in section 2(b)(1)(A);
          (2) may come into contact with a senior citizen as a regular 
        part of the duties of the officer, employee, or registered 
        representative; or
          (3) may review or approve the financial documents, records, 
        or transactions of a senior citizen in connection with 
        providing financial services to a senior citizen.
  (b) Training.--
          (1) In general.--The training described in this paragraph 
        shall--
                  (A) instruct any individual attending the training on 
                how to identify and report the suspected exploitation 
                of a senior citizen;
                  (B) discuss the need to protect the privacy and 
                respect the integrity of each individual customer of a 
                covered financial institution; and
                  (C) be appropriate to the job responsibilities of the 
                individual attending the training.
          (2) Timing.--The training required under subsection (a) shall 
        be provided as soon as reasonably practicable but not later 
        than 1 year after the date on which an officer, employee, or 
        registered representative begins employment with or becomes 
        affiliated or associated with the covered financial 
        institution.
          (3) Bank secrecy act officer.--An individual who is 
        designated as a compliance officer under an anti-money 
        laundering program established pursuant to section 5318(h) of 
        title 31, United States Code, shall be deemed to have received 
        the training described under this subsection.

SEC. 4. RELATIONSHIP TO STATE LAW.

   Nothing in this Act shall be construed to preempt or limit any 
provision of State law, except only to the extent that section 2 
provides a greater level of protection against liability to an 
individual described in section 2(b)(1) or to a covered financial 
institution described in section 2(b)(2) than is provided under State 
law.

                          PURPOSE AND SUMMARY

    Representatives Kyrsten Sinema, Bruce Poliquin, Patrick 
Murphy and Mick Mulvaney introduced H.R. 4538, the Senior$afe 
Act of 2016, on February 11, 2016. The Senior$afe Act provides 
that certain financial institutions will receive immunity from 
civil or administrative proceedings if the financial 
institution provides training to supervisory, compliance or 
legal employees to identify and report the suspected 
exploitation of a senior citizen to specified law enforcement 
or regulatory authorities.

                  BACKGROUND AND NEED FOR LEGISLATION

    According to a study conducted by MetLife, seniors lose at 
least $2.9 billion annually in reported cases of financial 
exploitation. It has been estimated that one in five seniors, 
age 65 and older, have been the victim of financial fraud. 
However, despite the prevalence of senior financial fraud, the 
National Adult Protective Services Association estimated that 
only one in 44 cases of financial abuse is ever reported.
    H.R. 4358 enables financial institutions and their 
employees to communicate with the appropriate regulatory and 
law enforcement agencies when there is a suspicion of financial 
exploitation of their clients. The Senior$afe Act also 
encourages, but does not require, financial institutions to 
offer employees training regarding the reporting of fraud 
against seniors; institutions offering such training may seek 
to avail themselves of the safe harbor from liability provided 
by the Act.
    Seniors can be susceptible to financial fraud because 
current bank privacy laws make it difficult for these entities 
to report any potentially fraudulent activity. H.R. 4538 would 
protect banks, credit unions, investment advisers, broker-
dealers, and insurance companies--and their employees--from 
civil or administrative liability, as long as employees receive 
training in how to spot and report predatory activity and 
reports are made ``in good faith'' and ``with reasonable 
care.''
    H.R. 4538 is based on the state of Maine's Senior$afe 
program, an initiative launched in 2014 that was designed to 
train financial professionals to detect and report senior 
financial abuse. Senators Susan Collins and Claire McCaskill 
introduced similar legislation in October of 2015, S. 2216, 
``Senior$afe Act of 2015.''

                                HEARINGS

    The Committee on Financial Services' held no hearings 
examining matters relating to H.R. 4538.

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
June 15 and June 16, 2016. An amendment in the nature of a 
substitute offered by Ms. Sinema was agreed to by voice vote. 
The Committee ordered H.R. 4538 to be reported favorably to the 
House as amended by a recorded vote of 59 yeas to 0 nays 
(recorded vote no. FC-108), a quorum being present.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole record vote in committee was a motion by Chairman 
Hensarling to report the bill favorably to the House as 
amended. That motion was agreed to by a recorded vote of 59 
yeas to 0 nays (Record vote no. FC-108), a quorum being 
present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 4538 
will reduce financial fraud against seniors by providing that 
certain employees of a covered financial institution that 
receive training, and financial institutions that provide 
training regarding the identification and reporting of the 
suspected exploitation of a senior citizen, would not be liable 
for disclosing such exploitation to a covered agency, provided 
that the individual made the disclosure in good faith and with 
reasonable care.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 1, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4538, the 
Senior$afe Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sarah Puro.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 4538--Senior$afe Act of 2016

    H.R. 4538 would exempt financial institutions and some of 
their employees from liability in any civil or administrative 
proceeding when those employees report to a government agency 
about the potential exploitation of a senior citizen. Based on 
information from the federal banking regulators, CBO concludes 
that the bill would not change their policies towards such 
reporting. Accordingly, CBO estimates that enacting the bill 
would have no effect on the federal budget.
    Enacting the bill would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 4538 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    H.R. 4538 would impose an intergovernmental mandate as 
defined in the Unfunded Mandate Reform Act (UMRA) by preempting 
state laws that provide a lower level of liability protection 
for certain financial institutions and their employees than 
would be provided under the bill. The bill would exempt from 
liability financial institutions and employees of those 
institutions that have received training on the financial 
exploitation of senior citizens and have filed reports of such 
exploitation to an appropriate government authority. Although 
the preemption would limit the application of state laws and 
regulations, CBO estimates that the bill would impose no duty 
on state, local, or tribal governments that would result in 
additional spending or a loss of revenues.
    H.R. 4538 also would impose a private-sector mandate by 
removing a private right of action. The bill would eliminate 
the right of plaintiffs to file a civil action against certain 
financial institutions and their employees. The cost of the 
mandate would be the forgone net value of awards and 
settlements that would have been awarded for such claims in the 
absence of the bill. A search of the available literature 
suggests that few of those specific types of lawsuits have been 
brought under current law.
    Although there is uncertainty about the number of claims 
against financial institutions and their employees that would 
be successful and about the value of awards or settlements in 
those cases, because of the narrow scope of the cases involved, 
CBO expects that the cost of the mandate in any one year would 
fall below the annual threshold for private-sector mandates 
established in UMRA ($154 million in 2016, adjusted annually 
for inflation).
    The CBO staff contacts for this estimate are Sarah Puro 
(for federal costs), Rachel Austin (for intergovernmental 
mandates) and Logan Smith (for private-sector mandates). The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    H.R. 4538 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 4538 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   DISCLOSURE OF DIRECTED RULEMAKING

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 4538 contains no directed 
rulemaking.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1: Short title

    This section cites H.R. 4538 as the ``Senior$afe act of 
2016.''

Section 2: Immunity

    This section sets forth definitions including that of a 
covered financial institution, which means: (a) a bank; (b) a 
credit union; (c) an investment adviser; (d) a broker-dealer; 
and (e) an insurance company.
    This section sets forth that individuals who receive 
training are not liable for any civil or administrative 
proceeding if they disclose the exploitation of a senior 
citizen to a covered agency with reasonable care. In addition, 
covered financial institutions that provide training to 
employees are not liable for any civil or administrative 
proceeding arising from the individual's disclosure.

Section 3: Training required

    This section outlines the training that is required for 
employees or financial institutions that interact with senior 
citizens. The training shall instruct individuals how to 
identify suspected exploitation of a senior citizen, shall 
instruct individuals how to respect the privacy of customers, 
and shall be appropriate to the individual in the training. The 
training shall be provided no later than 1 year after 
employment.

Section 4: Relationship to State law

    This section states that this bill shall not preempt State 
law except to the extent that the Senior$afe Act provides a 
greater level of liability protection than is currently 
provided for in state law.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 4538 does not repeal or amend any section of a 
statute. Therefore, the Office of Legislative Counsel did not 
prepare the report contemplated by Clause 3(e)(1)(B) of rule 
XIII of the House of Representatives.

                                  [all]