ASSEMBLY, No. 2860

 

STATE OF NEW JERSEY

 

INTRODUCED MAY 1, 1997

 

 

By Assemblymen LeFEVRE and BLEE

 

 

An Act concerning the release of certain account information by a financial institution under certain circumstances and supplementing Title 17 of the Revised Statutes.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. The Legislature finds and declares that many customers of financial institutions have worked diligently to accumulate savings and other resources deposited in, or managed by, financial institutions. Some of these customers are vulnerable to fraudulent or other illegal schemes because of advanced years or because of physical or mental illness, disability or deficiency, or because they lack sufficient understanding of and do not have the capacity to make, communicate or carry out decisions concerning the management of their savings or resources. Financial institutions, in the course of conducting business with these vulnerable customers and senior customers, suspect, from time to time, that these customers are targets of illegal schemes but choose not to act because they are unclear about the conditions under which they may release account information, how much information may be released, and the entities to whom they may release such information. Therefore, the Legislature finds that it is appropriate to provide statutory guidance to financial institutions in this situation.

 

    2. As used in this act:

    "Account" means a deposit or fiduciary account maintained with a financial institution in the senior or vulnerable customer's name.

    "Community setting" means a private residence or any noninstitutional setting in which a person may reside alone or with others, but shall not include residential health care facilities, rooming houses or boarding homes or any other facility or living arrangement subject to licensure by, operated by, or under contract with, a State department or agency.

    "County adult protective services provider" means a county Board of Social Services or other public or nonprofit agency with experience as a New Jersey provider of protective services for adults, designated by the county and approved by the Commissioner of Human Services pursuant to the "Adult Protective Services Act," P.L.1993, c.249 (C.52:27D-406 et seq.).

    "Financial institution" means a state or federally chartered bank, savings bank, savings and loan association or credit union.

    "Financial record" means an original of, a copy of, or information known to have been derived from, any record held by a financial institution pertaining to a senior or vulnerable customer's account or relationship with the financial institution. 

    "Law enforcement agency" means a law enforcement agency of the State or of a local government unit.

    "Senior customer" means a natural person, who, to the financial institution acting in good faith, appears to be at least 60 years of age, who utilized or is utilizing any service of a financial institution, or for whom a financial institution is acting or has acted as a fiduciary, in relation to an account maintained in the person's name.

    "Vulnerable customer" means a natural person, who is at least 18 years of age, resides in a community setting, and, to a financial institution acting in good faith, appears to have a physical or mental illness, disability or deficiency, or lacks a sufficient understanding of, and the capacity to make, communicate or carry out decisions concerning, the management of the customer's savings or resources, who utilized or is utilizing any service of a financial institution, or for whom a financial institution is acting or has acted as a fiduciary, in relation to an account maintained in the person's name.

 

    3. Notwithstanding any other law, regulation or common law to the contrary, a financial institution may release the financial records regarding a customer's account to a law enforcement agency, a county adult protective services provider, or both if:

    a. A vulnerable customer or a senior customer has a beneficial interest in the account either wholly or in part; and

    b. The financial institution suspects that illegal activity is, or will be, taking place which involves the account including, but not limited to, defrauding any vulnerable or senior customer who has a beneficial interest in the account.

 

    4. a. Any financial institution, or officer, employee, or agent thereof, making a disclosure of information pursuant to this act, shall not be liable to the customer under any law or regulation or common law of this State for that disclosure or for any failure to notify the customer of that disclosure.

    b. A financial institution, or officer, employee, or agent thereof, which decides in good faith not to disclose information which it is permitted to disclose under this act regarding the account or relationship of a senior or vulnerable customer shall not be liable under any law or regulation or common law of this State for that decision.

 

    5. This act shall take effect immediately.

 

STATEMENT

 

    The senior citizens and vulnerable adults of this State are sometimes targets of illegal schemes involving their accounts in New Jersey financial institutions. In some of these cases, the financial institutions have knowledge of, or a suspicion of, illegal activity involving the accounts but are reluctant to inform authorities because they may be subject to a civil suit alleging that the customer's common law right of privacy was violated.

    This bill provides that financial institutions may release certain customer account information relevant to actual or suspected illegal activities to a law enforcement agency or a county adult protective service provider, or both.

    If a financial institution makes the release of information in accordance with the provisions of this bill, it would be immune from liability under any law or regulation or common law of this State in a suit alleging that the customer's right of financial privacy had been violated. In addition, if a financial institution, officer, employee or agent thereof, decides in good faith not to disclose information it is permitted to disclose under this bill, it would not be liable under any law or regulation or common law for that decision. This bill would give financial institutions legal comfort in contacting law enforcement agencies or county adult protective service providers in those cases where they suspect that illegal activity has occurred or may occur involving an account in which a senior or vulnerable customer has a beneficial interest.

    The federal "Right to Financial Privacy Act of 1978," 12 U.S.C. §3401 et seq., provides, among other things, that a financial institution may release account information to federal governmental agents if the information may be relevant to a possible violation of any statute or regulation. However, the federal law does not address releases of information to state, county or municipal law enforcement agencies or to county adult protective service providers. This bill would complement and parallel the federal act by providing that financial institutions may release relevant information to State and local law enforcement agencies as well as to county adult protective service providers if a financial institution suspects illegal activity related to a senior or vulnerable customer's account.

 

                             

 

Permits release of certain account information by a financial institution under certain circumstance.