Despite Mandated Reporting Laws, Financial Institutions are not Subject to Civil Liability
The elderly population in the United States has steadily been on the rise. Between 1900 and 1996, the population of elders grew from 3 million to 34 million. As the “baby boomer” generation begins to retire, our society will need to make several adjustments. While the first thing that comes to mind when discussing the elderly may be programs such as social security or healthcare, the laws applicable to elders deserve some attention as well.
The California Welfare Code includes sections on who is required to report signs of physical or financial elder abuse to Adult Protective Services or the local law enforcement agency. Included in that law are nursing home workers, healthcare practitioners, ombudsmen, and members of the clergy. The law also deems all officers and employees of financial institutions mandated reporters of suspected financial elder abuse. Recently, a California Appellate Court decided whether the mandated reporting requirement for financial institutions could serve as a legal basis for civil liability.
In Das v. Bank of America, N.A., 186 Cal. App. 4th 727 (2010), Mr. Das’ (the deceased) daughter filed several suits against Bank of America for allowing her father—who suffered from strokes, brain tumors, and dementia—to make a series of transfers overseas totaling over $300,000. She claimed her father’s lack of capacity was readily apparent to casual observers and that bank employees even “wondered” about his state of mind, but did not report Mr. Das’ strange behavior despite the suspicious nature of his transactions. The Second Appellate District, however, found that the legislative intent of the section on mandated reporting for financial institutions was explicitly limited to the government and negates any intent to enlarge the legal basis for a private civil action. Accordingly, they were unable to expand the application of the law despite the egregious circumstances.
There are many ways to protected loved ones from financial elder abuse including conservatorships and financial powers of attorney. If you are interested in learning about how you might be able to protect a loved one from financial abuse, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.