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<ns0:Id>20250AB__267499INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureNum>2674</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Schiavo</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Assembly Members Ahrens, Berman, Carrillo, Fong, Harabedian, Hart, Lowenthal, Pellerin, Ransom, and Stefani)</ns0:AuthorText>
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<ns0:Name>Schiavo</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
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<ns0:Name>Berman</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Carrillo</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Fong</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
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<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Hart</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Lowenthal</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
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<ns0:Name>Pellerin</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ransom</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Stefani</ns0:Name>
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<ns0:Title> An act to add Division 21 (commencing with Section 60000) to the Financial Code, relating to financial institutions.</ns0:Title>
<ns0:RelatingClause>financial institutions</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Financial abuse and deception: preventive measures.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law generally regulates financial institutions, including the California Consumer Financial Protection Law that, among other things, requires the Department of Financial Protection and Innovation to exercise nonexclusive oversight and enforcement authority under California consumer financial laws.</html:p>
<html:p>This bill would require a depository institution, as defined, to take certain actions that would help protect its customers from financial abuse and deception, as defined, including by requiring a depository institution that suspects financial abuse or deception with respect to any transaction to employ certain preventive measures, as prescribed, except as specified.</html:p>
<html:p>This bill would authorize a customer who has suffered harm from financial abuse or deception and did not receive a required preventive
measure to, within 60 calendar days of the relevant suspect transaction, provide oral or written notice to the depository institution, as specified. The bill would require a financial institution to investigate the noticed transaction and relevant account history and would provide a liability shield to a financial institution that refunds the amount of the suspect transaction plus interest, as prescribed.</html:p>
<html:p>This bill would authorize a customer to bring a civil action to enforce its provisions, as specified.</html:p>
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<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_94136713-570E-45D2-8192-113B59A9580C">
<ns0:Num>SECTION 1.</ns0:Num>
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Division 21 (commencing with Section 60000) is added to the
<ns0:DocName>Financial Code</ns0:DocName>
, to read:
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<ns0:LawHeading type="DIVISION" id="id_5F1C7C99-8E5F-454E-8EE6-EA3F08A01A74">
<ns0:Num>21.</ns0:Num>
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<ns0:LawHeadingText>Financial Abuse and Deception</ns0:LawHeadingText>
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<ns0:Num>60000.</ns0:Num>
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<html:p>As used in this division:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Account” means a contract for the deposit of funds between a depositor and a depository institution that meets either of the following criteria:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The account is a customer account owned by a customer, whether individually or with one or more other persons.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The account is a line of credit owned by a customer, whether individually or with one or more other persons.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Customer” means an individual or sole proprietor who has transactional authority over an account with the depository institution.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Customer-interacting employee” means an employee or contractor of a depository institution whose job duties may include communicating with customers.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Depository institution” means a bank or credit union doing business in accordance with a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Financial abuse or deception” means any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Taking, appropriating, obtaining, or retaining the property of a customer, or attempting to take, appropriate, obtain, or retain the property of a customer, for a wrongful use or with intent to defraud.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The inducement of a payment, or attempted
inducement of a payment, by a person misrepresenting that person’s identity, that person’s association with or authority to act on behalf of another person, or the ownership of an account to be credited.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An act or omission by a person, including through the use of a power of attorney, guardianship, trustee, or conservatorship of an eligible adult, intended to do either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Obtain control, through deception, intimidation, or undue influence, over a customer’s money, assets, or property to deprive the customer of the ownership, use, benefit, or possession of the customer’s money, assets, or property.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Convert money, assets, or property of the customer to deprive the customer of the ownership, use, benefit, or possession of the customer’s money, assets, or property.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“Preventive measure” means an action required of a depository institution by Section 60001.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Suspect transaction” means account activity that is an attempted or successful transfer, withdrawal, or deposit of money, into or from the account, in which the surrounding circumstances are suspicious, unusual, consistent with known deceptive tactics, or likely to be the result of financial abuse or deception.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Trusted third party” means an individual who is any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
An adult authorized by the customer to be contacted by the depository institution or any individual who is a parent, spouse, or other adult family member of a customer who the depository institution believes is closely associated with the customer.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A coowner, additional authorized signatory, agent under a power of attorney, or beneficiary on a customer’s account.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A trustee, conservator, guardian, or other fiduciary.
</html:p>
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<ns0:LawSection id="id_5960FD45-8677-4B1E-9A64-AE6FC7BFE417">
<ns0:Num>60001.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A depository institution shall provide to any customer-interacting employee both of the following when new information becomes available but no less often than once every six months:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Current information about new patterns, modes, and basis for financial abuse or deception.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Training to recognize the signs of financial abuse or deception in customers.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A depository institution shall not ignore or devalue any sign of financial abuse or deception based on the age, language capacity, or education of a customer.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A depository institution
shall maintain and execute procedures, including those required by subdivision (d), to intervene for the purpose of eliminating or mitigating financial harm in any suspect transaction.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A depository institution that suspects financial abuse or deception with respect to any in-person suspect transaction shall employ all of the following preventive measures:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A depository institution shall advise the customer to contact the person for whom the customer is initiating the suspect transaction if the customer did not initiate the communication from which the suspected transaction originated and shall inform the customer that the transaction can wait for independent verification because the transaction cannot be undone.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A depository institution shall encourage the customer to contact a nonprofit, nationally
recognized fraud hotline that can help determine if the situation is harmful.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If a customer has provided the depository institution with the contact information for an optional trusted third party and the depository institution does not have reason to believe that the trusted third party is causing, or will cause, financial harm to the customer, the depository institution may contact the trusted third party for assistance to intervene in the suspect transaction.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
For any suspect transaction, a depository institution shall disclose to the customer that the depository institution cannot be held liable for harms related to the suspect transaction that result in financial abuse or deception if it has complied with this section.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The disclosure required by this paragraph shall be
provided in the same language in which the customer customarily conducts transactions or communications with the depository institution.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A depository institution that suspects financial abuse or deception with respect to a suspect transaction that is not made in person and is not expedited shall intervene to prevent financial harm to the customer by, at a minimum, prominently providing the following warning to the customer in the preferred language of the customer and with the last two sentences in bold type that is larger than the other text in the warning:
</html:p>
<html:p>“If this transaction is the result of a communication that was not initiated by you, you should independently verify the information with the person for whom you are making this transaction. Scammers work hard to rush victims and keep them from disengaging. If this is a legitimate request, verification should not be a
problem. If you believe a loved one is in danger, contact the police or another loved one. The transaction cannot be reversed. This institution cannot be held liable pursuant to Division 21 (commencing with Section 60000) of the Financial Code for harms from this transaction related to financial abuse or deception.”</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The warning described in this subdivision shall be optimized for all electronic devices upon which a customer may complete a transaction.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except as provided in paragraph (2), a depository institution that complies with this section, whether it approves distribution of, delays, or denies funds, shall not be held liable for any harm related to financial abuse or deception that results from the specific suspect transaction.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Paragraph (1) does not apply with respect to a
customer who is a minor.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
A depository institution that denies a suspected transaction pursuant to contractual terms may do so without providing the customer with the preventative measures described in subdivisions (d) and (e).
</html:p>
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<ns0:LawSection id="id_AA17AC63-1914-4DB0-AECD-7AA2402F2046">
<ns0:Num>60002.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
If a customer who has suffered harm from financial abuse or deception did not receive a required preventive measure, the customer may, within 60 calendar days of the relevant suspect transaction, provide oral or written notice to the depository institution that does both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Enables the depository institution to identify the name and account number of the customer and to identify the suspect transaction.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Indicates the customer’s belief that the suspect transaction resulted in harm from financial abuse or deception.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A depository institution, within 30 calendar
days of receiving a notice pursuant to subdivision (a), shall complete an investigation of the suspect transaction and relevant customer account history to determine if a preventive measure should have been employed.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A depository institution that determines that any preventive measure should have been employed but was not shall notify the customer within one business day of completing its investigation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A depository institution that determines that any preventative measure should have been employed but was not and refunds, within one business day of completing its investigation, to the customer the amount of the suspect transaction along with any interest that would have accrued but for the completed suspect transaction from the date of the notice shall be deemed to have cured any violation of this title.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A depository institution that determines that a preventive measure was not necessary shall cause to be delivered to the customer an explanation of its findings within three business days after the conclusion of its investigation and provide a reproduction of any document that the depository institution relied on to make that determination.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A depository institution that cannot reasonably conduct an investigation within 30 calendar days shall notify the customer in writing before the conclusion of the 30 calendar days that it will utilize a 15-calendar-day extension.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
As used in this paragraph, “document” includes any account records, internal call notes, audio records, video footage, automated teller machine (ATM) records, and any other evidence used by the depository institution to make
its determination.
</html:p>
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<ns0:LawSection id="id_31CE6361-3A36-4A29-9A59-EE38E34E32C9">
<ns0:Num>60003.</ns0:Num>
<ns0:LawSectionVersion id="id_32189652-572F-4F04-AA1B-B6B695D6968B">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A customer may bring a civil action for both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Statutory damages in an amount equal to one hundred dollars ($100) for each day that a depository institution is not in compliance with the requirement to complete an investigation pursuant to paragraph (1) of subdivision (b) of Section 60002.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Reasonable attorney’s fees and costs.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A customer who suffered harm from financial abuse or deception arising from a suspect transaction with respect to which the depository institution did not comply with this title, or did not refund the customer pursuant to Section 60002, may bring a civil action
for all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Actual damages.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Statutory damages in an amount to be determined by the court of at least five thousand dollars ($5,000) but not more than ten thousand dollars ($10,000) per violation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In determining the amount of statutory damages under this paragraph, the court shall consider, among any other thing the court deems relevant, the frequency and persistence of noncompliance with this title, the nature of that noncompliance, and the extent to which the noncompliance was intentional.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Each instance in which a financial institution does not comply with this title with respect to a specific suspect transaction constitutes a separate violation of this division.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A declaration that the customer is not obligated to the depository institution on the suspect transaction.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A declaration that any security interest or other interest the depository institution may have purportedly obtained in the victim’s property in connection with the suspect transaction is void and unenforceable.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
An injunction restraining the depository institution from collecting, or attempting to collect, from the victim on the suspect transaction, from enforcing or attempting to enforce any security interest or other interest in the victim’s property in connection with the suspect transaction, or from enforcing or executing any judgment against the victim on the suspect transaction.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Reasonable attorney’s fees and costs.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Any equitable relief that the court deems appropriate.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If, in a civil action brought pursuant to this section, the court finds that the depository institution unreasonably concluded that the depository institution did not err when it did not provide a preventive measure, the customer shall be entitled to treble damages.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
If, in any action under this title, the court finds that the depository institution erroneously concluded that the depository institution did not err when it did not provide a preventive measure to a customer who is a senior citizen, as defined in Section 1761 of the Civil Code, the customer shall be entitled to treble damages.
</html:p>
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