Credit Union News

The Latest Industry News Coverage

Sacramento capitol dome

VICTORY: Elder Financial Abuse Liability Bill Will Not Advance

Senate Bill 278, authored by California Senator Bill Dodd (D-Napa), will not be advancing forward during the state’s current legislative session — a MAJOR VICTORY! This legislation would have greatly increased liability for credit unions and sparked a huge rise in litigation.

“We want to thank everyone who attended our California Government Relations Rally earlier this year,” said Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues. “We hope this encourages more credit union leaders to attend next year’s event as we steadily work to win over state legislators’ hearts and minds for the credit union cause.”

Overall, SB 278 would have made credit unions liable for elder financial abuse if they “should have known” fraud was occurring. This language in the bill would have carried forward a devastating impact for credit unions, with negative implications for their members who are seniors as well.

The fight surrounding this bill started early in California’s legislative session, with the California Credit Union League’s opposition being the centerpiece of the League’s Government Relation Rally (GRR) in Sacramento this past April.

“Educating lawmakers on the downfalls of this well-intended bill early in the process was key to our success,” said Robert Wilson, senior vice president of state government affairs for the Leagues.

In addition to the effort put forward during GRR and continual lobbying efforts, the League would also like to recognize and thank everyone who participated in the grassroots effort. Nearly 1,800 messages were sent to state senators over just a few short weeks, and many credit union leaders and supporters placed key phone calls to lawmakers’ offices.

“This victory speaks to our cooperative nature,” Wilson said. “When we all focus our energies on a particular harmful piece of legislation, we can move mountains.”

There will be an informational hearing on elder financial abuse this autumn which could dictate the future of legislation on this topic. SB 278 could still be heard next year in the California State Legislature — and if so, the League and credit union leaders have time to work on a more meaningful solution.

“Once again, a huge THANK YOU goes out to all of those who were involved, from attending GRR to spearheading our important grassroots effort,” Wilson said. “We were successful in communicating that SB 278 would be harmful for credit unions — and most importantly, your senior members. Our efforts have been amplified and heard through the power of one voice.”

League’s ‘Oppose SB 278 Unless Amended’ Campaign
During the League’s Connect for the Cause campaign to oppose Senate Bill 278, the League and credit union leaders urged credit union staff, board volunteers, and members to send messages to state lawmakers to oppose the following:

  • SB 278 would have significantly expanded the liability of credit unions and even their employees in instances of elder financial abuse. As drafted, the bill applied to all transactions (containing personal liability for supervisors) and had a completely unworkable “safe harbor” that the League felt would lead to a rapid erosion of senior members’ relationships with their credit unions.
  • Credit unions would have undoubtedly had some very upset senior members.
  • Credit unions had produced amendments they felt would lead to more prevention of fraud while not destroying the banking relationship between seniors and their credit unions.

“Thank you all once again for your crucial support in defeating Senate Bill 278,” Wilson said.

For questions, email Robert Wilson.

Related News

Become an Industry Supporter

Get membership information

Please contact me about compliance

Contact me about Credit Union Solutions

Education & Professional Development