Minnesota community banks now have new tools and protections with which to defend vulnerable adults from financial abuse. On Saturday, Gov. Walz signed SF2466 into law. The new law provides financial institutions with stronger immunity protections when they report or take certain actions on suspected financial abuse of vulnerable adults. ICBM – through the hard work of Elizabeth Emerson and Andrew Hasek from our government relations team at Goff Public – was instrumental in moving this legislation forward in a session complicated by COVID-19 disruptions. With session ending at 12 a.m. this morning, the bill passed just in time for the Governor to sign before the end of the formal session.
What does the bill do?
SF2466 is modeled on 2018 legislation that provided immunity protections to security broker-dealers that encounter instances of suspected financial abuse. This bill extends immunity from civil or criminal liability to financial institutions that report instances to the Minnesota Adult Abuse Reporting Center (MAARC), cooperate in an investigation of financial exploitation of an eligible adult, or testify about alleged financial exploitation in a judicial or administrative proceeding.
The law also allows financial institutions to place a hold on or delay transactions they suspect are related to financial exploitation. Bank customers affected by such a hold can appeal to the Commissioner of Commerce for the termination of the action. The law requires a financial institution to delay or place a hold on suspected transactions if informed by the Department of Commerce, law enforcement agency, or the prosecuting attorney of a suspected case of financial exploitation.
Delivering on Members’ Legislative Priorities
ICBM added financial elder abuse legislation to its platform after members indicated clear interest in 2018 in creating immunity protections for banks that act to prevent abuse. We began work that year on a bill to accomplish that goal and identified the broker-dealer statute as a conduit for providing the same safe harbor to reporting financial institutions.
Since enabling financial professionals to help protect their customers had precedent in Minnesota law, ICBM made progress during the 2019 legislative session in meetings with stakeholders and in recruiting legislative champions. During that busy session, there was a senate version of the bill introduced (SF2466). The house bill didn’t make substantive progress.
ICBM continued to work on the bill and went into the 2020 session knowing we could waste no time in meeting with lawmakers. While the bill made progress in the Senate and had received a few hearings, it received little attention in the house until our government relations team met with Rep. Jennifer Schultz (D-Duluth). Schultz became a champion for the house version of the bill. Even while the COVID-19 pandemic completely disrupted the legislative process, ICBM President and CEO Jim Amundson offered testimony in support of the bill in a House Commerce committee meeting; we also wrote a letter to legislators urging their support. Rep. Schultz noted ICBM as a key supporter of the bill when it passed off the House floor with resounding bipartisan support.
We want to thank Andrew and Elizabeth for their hard work, our membership for their leadership, and the other trade associations that worked on this. We also want to extend great gratitude to the Department of Commerce, Senator Karin Housley (R-Woodbury), and Representative Schultz for championing this proposal. We are proud to have led the passage of this bill. It will increase protections for our community bank members and their customers!
2021 Groundwork for Credit Union Task Force
Earlier this year, the wave of credit union acquisitions of community banks arrived in Minnesota with the announced deal between Wings Financial Credit Union and Neighborhood National Bank. As Jim Amundson wrote in February, “This continues a disturbing trend that promises a negative impact on taxpayers in Minnesota and nationwide. Through these deals, large credit unions are increasing their taxpayer-subsidized footprint by buying smaller, tax-paying community banks. Given the harm this does to federal and state tax bases, policymakers in St. Paul and Washington should put an end to these transactions.”
After Wings announced the deal, ICBM immediately began to build support for legislative action to put an end to credit union acquisitions of tax-paying community banks. Through discussion with Representative Bob Vogel (R-Elko New Market), we identified HF4626 as a starting place. Rep. Vogel introduced the bill a week ago. Senator Rich Draheim (R-Madison Lake) also introduced the Senate version (SF4602) on May 12. The bill would create a “work group” to analyze credit union acquisitions of banks and the potential tax implications of those transactions.
Because we believe this is an important issue for Minnesota, not just for our members, we are energized to continue to push forward to pass this measure during the 2021 session. This is an issue that will get staunch opposition. If it is going to succeed, community bankers will need to come together to engage lawmakers across the state.